Member for Mallee Andrew Broad believes a proposed wind farm at Murra Warra will struggle to attract the offshore investment it needs to go ahead.
In a meeting with Yarriambiack councillors, Mr Broad explained to the council that even with subsidies provided by the government’s Renewable Energy Target, the 110-turbine proposal would only return about eight per cent on investment.
“All off-shore investors are wanting 15 per cent now,” he said.
Mr Broad said he favoured leaving the target at 20 per cent of Australia’s energy being renewable, but wanted the deadline for the target extended from 2020 to 2030.
Yarriambiack Mayor Andrew McLean said he did not think RES Australia would be pursuing the project if there was not a potential to deliver profits.
“Andrew put to us what he believed to be his facts and figures to try to show us that the energy companies were unlikely to get investors at rate of return,” he said.
Cr McLean said he was unsure if the company would proceed if there was a change to the target.
“When we met with them it appeared they’d prefer to stay as is,” Cr McLean said.
“I’d hope they would continue with the project but Mr Broad wasn’t able to give us a time when the decision will be made by the government.”
Mr Broad said it was difficult for wind farms to deliver a strong business case given current energy prices and a power oversupply in Victoria.
“The council’s response to that was fair, they said it’s not their concern around the business case,” he said.
“All they are concerned about is creating the planning and having an open door to investment – that’s probably a wise response.
“Is this project likely to proceed? I don’t know, probably not while we’ve got an oversupply of electricity.”
Mr Broad said down the track increased energy demand might make the Murra Warra project more viable.
“Nothing’s stopping this except the economics of the investment,” he said.
Cr McLean said he would prefer to see Mr Broad backing development within the shire.
He said there would be direct and indirect economic gains for the shire if the project went ahead.
“The proposition they’ve come to us with is money in lieu of rates, which helps our overall costs,” he said.
“During construction they are talking more than 200 jobs and after construction there will be ongoing jobs.
“We’re trying to keep our population here by making sure there’s jobs and if they contribute to the council budget, it’s a bonus,” Cr McLean said.
He said he would like to see continued investments in renewable energy and a reduction in coal-generated power.