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Australia wind energy industry turns a corner – thanks to states

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The large scale renewable energy market in Australia appears to have taken off again, finally bringing to an end the three year investment drought that was the main legacy to the industry of the Abbott government. But the industry has state governments to thank, not the feds.

hornsdale stage one

On Thursday, the 100MW stage one of the Hornsdale wind farm in South Australia was switched on for the first time in an “energisation ceremony” hosted by its French and German builders, Neoen and Siemens.

The French-based Neoen has a rapidly growing portfolio of wind and solar projects in the country, courtesy of its decision to enter the local market in 2012, and riding through the investment drought that followed.

Global CEO Xavier Barbaro said Australia was now becoming a “great place” to invest.

“Neoen has been able to use our extensive wind and solar assets to expand rapidly in Australia since we started operations here in 2012,” he said during a visit to Australia for the opening. “We look forward continued success in Hornsdale and across the country.”

Hornsdale is one of a number of wind and solar farms being built around the country, and almost all owe their existence to state-based initiatives to short-circuit the investment drought caused by federal policy flip flops and the resulting capital strike by major utilities.

Hornsdale stage one, and the 100MW Hornsdale stage 2 (which will be deliver country’s cheapest wind energy when built) are being constructed courtesy of the ACT government’s 100 per cent renewable energy target, and its effective use of a reverse auction mechanism, rather than a market-based scheme.

The first stage was a winner in the ACT’s first wind auction, while the second stage was a winner (with of bid of $A77/MWh) in the second stage. Ultimately, the wind farm will be 270MW. Megawatt Capital owns a minority stake in the wind farm.

Two other projects, the recently completed Coonooer Bridge wind farm in Victoria and the Ararat wind farm in Victoria are also being built after winning ACT government contracts. The Sapphire wind farm in NSW and three small solar farms also won ACT contracts. Another 200MW tender – open to both wind and solar – is being conducted now.

State governments have also taken the initiative to ensure that what investment does occur happens within their own boundaries.

On Wednesday, Victoria announced the imminent construction of two new wind farms, the 66MW Mt Gellibrand project and the 30MW Kiata project, after awarding 10-year contracts after offering to buy renewable energy certificates through a tender.

Another major wind farm, the 170MW Mt Emerald project in Queensland, is also about to begin construction after winning a contract with the Queensland government owned Ergon Energy, while the Queensland and NSW governments have offered power purchase agreements to support 18 solar farms bidding for grant support in a large scale solar program being run by the Australian Renewable Energy Agency.

The only non-state government contracts awarded have been for the Clare solar farm (by Origin Energy), and the decision by Chinese wind turbine manufacturing giant Goldwind to finance its 175MW White Rock wind project in Northern NSW and sell into the spot market.

Neoen’s Barbaro said that he was proud to see his company’s ability to deliver on ambitious clean energy targets.

“Hornsdale is a great example of the global strength of France and Germany working together to provide clean energy for 70,000 Australian homes and new employment, training and investment opportunities in South Australia and the ACT.”
The wind turbines are supplied by Siemens, and, in what is believed to be a world first, one of the turbine towers will feature local indigenous Australian artwork from the local Nadjuri and Nukunu people.
hornsdale map
The wind farm features the latest in blade technology that harvests more wind energy – increasing the annual energy yield of the turbines. Each rotor of the 32 state-of-the-art turbines sweeps a total of 10,000m2 – an area equal to 320 school buses parked together.
Colin Byles, the CEO of the Northern Areas Council said the project had brought many benefits and injected a “new energy” into the area.

“You can see the impact through increased patronage of hotels and other accommodation, cafes and small retailers,” he said in a statement. “Also, farmers benefit by having a regular source of income and road infrastructure that even benefits local volunteer fire fighters with new access roads.”

 

  

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  • Tim Forcey

    Yikes with not much sun and little or no wind, wholesale electricity price forecast soon at $14,000/MWh in South Australia… http://www.aemo.com.au

    • Ian

      Yikes indeed, Giles please explain! (Not everything is as it seems)

      • Lots of people scratching their heads. High gas prices, but doesn’t explain this much, few market players who can basically charge what they want. used to happen quite often a few years ago during day time before solar came along. biggest concern for me is not these spikes, but the constant pricing of between 200-400. if gas is that expensive, then surely a move to solar thermal and other solar and storage should be accelerated.

  • Moneyandworktime

    Wind is now the cheapest form of new electricity in the US at 3.6 cents per kilowatt hour (2.5 cents subsidized). Solar PV is now 5 to 7 cents per kilowatt hour (5 cents subsidized). Modern renewables are taking over the energy market because they are the cleanest, fastest, cheapest, safest and most secure form of energy.

    August 19, 2015. US Wind Energy Selling At Record Low Price of 2.5 Cents per kWh:
    http://www.renewableenergyworld.com/…/us-wind-energy…

    September 30, 2015. Price of Solar Energy in the United States Has Fallen to 5¢/kWh on Average:
    http://newscenter.lbl.gov/…/price-of-solar-energy-in…/

  • Don McMillan

    Berkeley Lab Article. The Americans get subsidies right. They recognize the importance of diversified energy source especially locally generated. They learnt from the disruption generated from the Middle East. To encourage new technologies, they grant tax breaks and subsidies etc but always with a time limit. This forces companies to innovate, cut costs etc.

    Long ago, unconventional gas got a tax break sometime in the 1980’s and when withdrawn the companies complained as they would, but it turned out to be the best thing that could happen. It forced them to get of their pity pot and work/innovate etc. The rest is history.

    Contrast to the Dutch where their Government have recently concluded they’ll have to subsidise wind farms forever. Like everything subsidies can be helpful or a hindrance.