The ACT Government has formally launched the process for the reverse auction of 200MW of wind energy projects a key component of its plans to source 90 per cent of its electricity needs from renewables by 2020.
But in an apparent change of focus in the face of opposition from conservative state and federal politicians in nearby regions, the ACT has placed new emphasis on attracting bids from any project located in the National Electricity Market, which extends from Queensland to South Australia and includes Tasmania.
Minister for the Environment and Sustainable Development, Simon Corbell on Thursday called for companies to submit project proposals for auction process, which will set a feed in tariff. A similar mechanism was used for 40MW of solar farms, and is widely used in north and South America, Europe, Asia and South Africa.
However, Corbell said the auction would be open to companies that “have the ability to deliver wind farm facilities located anywhere in the country that falls within the National Electricity Market,” rather than just adjacent to the ACT. This could open the bidding for large, low cost wind projects such as Hornsdale in South Australia, although a 100MW limit of individual projects could be a restricting factor.
“The benefit of this is that we stand to receive a broader range of quality proposals that will result in the best value for money outcome to ACT electricity consumers,” Corbell said in a statement.
Insiders insist that the auction was always open to other projects in the NEM, but the new emphasis on more remote projects appears to be in response to fierce opposition – led by Federal Coalition MP Angus Taylor and others – to the idea that wind farms feeding the ACT could be built in their electorates. Taylor and other Coalition MPS have described wind turbines as “hideous”, and vowed to fight their installation.
Corbell said the proposals would be judged on a combination of factors, including price, local investment and proven community engagement. Price will account for around 60 per cent of the bidding weighting, with local investment and community engagement about 20 per cent each.
He said all proposals relating to wind farms that will be located outside the Australian Capital region will need to demonstrate “exceptional economic development benefits to ACT renewable energy industries”, and minimise costs to electricity consumers before they can be fully assessed.
Corbell said the 200MW wind auction is expected to provide about 24 per cent of the ACT’s electricity consumption in 2020 and will deliver about 40 per cent of the large-scale investments required to achieve the 90 per cent renewable energy target.
He said wind energy is expected to be the most cost-effective option to providing large-scale renewable energy. The 200MW of wind energy is expected to add around $1.40 to weekly household bills, out of a total additional cost of $4 for the 90 per cent target.
But Corbell says this cost will fall over time, and will be offset by energy efficiency initiatives that will lower the level of consumption.
Wind energy developers concede that the bidding will be fierce, given that the opportunities for wind farm developers are basically zero, given the uncertainty created by the Abbott government’s approach to renewable energy, and its insistent that its review of the renewable energy target be led by climate change skeptic and pro-nuclear advocate Dick Warburton. No large scale projects relying on the RET for financial support have been committed in Australia since 2012.
Proposals for the ACT wind auction are due by July 10.