Wind farm rate arrangements benefiting some councils, but not others in Tasmania 

In the remote north-east corner of Tasmania, where the “roaring forties” batter picturesque coastlines, dozens of colossal wind turbines power not just the grid but the local garbage service.

Dorset mayor Greg Howard said the Musselroe Bay Wind Farm was the municipality’s biggest ratepayer, helping fund local services from roads to recreation.

“It’s been a huge benefit,” he said.

“We still have a reasonably small rate base but a large road network and a large bridge network, which needs to be constantly renewed and repaired.”

Renewable energy projects are popping up across Australia as investors and communities cash in on the clean energy boom.

But while the winds of eastern Tasmania fill council coffers, the winds of the west do not.

No rates from westerly winds

There was great fanfare and government support surrounding the construction of a $280 million wind farm in the quiet shack community of Granville Harbour.

The potential rates excited West Coast Council, which had been struggling to maintain a sprawling network of ageing infrastructure as the closure of major mines has caused a collapse in population and council revenue.

But mayor Shane Pitt was surprised to discover the development would pay no rates while a $100,000 house down the road did.

“We don’t want to be greedy about it, we just believe we want something out of these industries to give back to the West Coast,” he said.

The reason why two wind farms of similar size, constructed just years apart have different rating arrangements all comes down to property.

Councils generally collect rates based on the value of a property as determined by the valuer-general, however Tasmania’s refused to include the wind turbines when assessing the Granville Harbour site.

A spokesperson for the Department of Natural Resources Tasmania said wind farms built on land owned by the operator were valued for rates.

But if a wind farm is built on leased land, and a condition of the lease is that “above-ground improvements” such as turbines are removed at the end of the lease “these improvements will not be included in the capital value of the underlying land”.

In practice, turbines worth millions of dollars, stretching more than 100 metres into the air, requiring gargantuan concrete foundations, connected to purpose-built transmission lines and expected to operate for decades are considered to be temporary fixtures and not a fundamental part of the property.

So only the farmland on which the wind farm is built pays rates, not the power plant itself.

‘Urgent reform’ needed for renewable energy projects

Legal skirmishes over whether or not wind turbines are “chattels” have broken out in New South Wales and Victoria but different courts have come to different conclusions.

Mr Pitt is demanding “urgent reform” to ensure his district reaps the rewards of renewable energy, but there seems to be little appetite from the state government.

In a letter to the West Coast Council, Tasmania’s Minister for Local Government Nic Street said there would be “significant complexity and risk associated” with Mr Pitt’s proposal and increasing rates on land would be weighed against the “risk of disincentives to investment”.

Mr Pitt rejected the idea it would be a “handbrake” on investment as Granville Harbour Wind Farm had repeatedly called the council to ask for its rates bill.

“They were of the understanding that the wind turbines would be rated,” he said. “That was in their feasibility study.”

Wind farm ‘proud’ of community support

A Granville Harbour Wind Farm spokesperson said they were “happy” to further discuss the issue with the council but rates policy was “a matter for the state government and the valuer-general”.

“And so it is not for us to comment on such matters,” they said.

The company was, however, “very proud” of its support of the West Coast community.

“Each year, the wind farm provides an estimated $2.12m increase in local economic output, we employ eight people on site and support the community with annual grants to good local causes worth a minimum of $20,000 each year,” they said.

One grant recipient was a junior netball program in the nearby town of Zeehan and coach Aleisha Maskell said the wind farm had been a “wonderful” supporter.

“Because without it, it’s hard to move forward with the future and provide our future generation with sport like this,” she said.

Back east, Dorset’s mayor hopes his council won’t miss out on rates from the upcoming North-East Wind project, which is 10 times the size of Granville Harbour.

“You would think it would be inappropriate to have a $2.7 billion project building in your municipality and council not receive any benefit,” Mr Howard said.