Hydro Tasmania blames vested interests for attack on renewables

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Australia’s largest generator of renewable energy opens 168MW Musselroe wind farm, but will drop future projects if government abandons renewable energy target.

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Australia’s largest producer of renewable energy, Hydro Tasmania, has warned that changes to the nation’s renewable energy target will bring the development of wind farms to a halt.

Hydro chairman David Crean suggested that the 168MW Musselroe wind farm that the company formally opened today could be the last major new development if the RET was diluted or removed.

He told RenewEconomy in an interview that gas generators in particularly were clearly campaigning against renewables to protect their own assets, and “vested interests” were active in trying to demonise renewable energy.

“The RET is a key driver for investment in wind farms,” Crean said. “The Musselroe project has only been made possible because of the RET and we need that (RET) to continue to be able to continue to build farms.”

Musselroe wind farm co-financed with Chinese firm

The $394 million Musselroe wind farm is the biggest built by the state-government owned Hydro Tasmania to date, and was co-financed by Chinese developer Shenhua Clean Energy, which now owns 75 per cent of this and the Studland Bay and Bluff Point wind farms.

Together, these will account for around 10 per cent of Tasmania’s annual electricity consumption, and Shenhua and Hydro Tasmania are looking for new investments. Crean said the largest was the controversial King Island project, but the two companies were also looking at sites on the mainland.

Crean said the Coalition had made a commitment to the RET while in Opposition, and long term policy security was essential for more investment.

“If the price (of renewable energy certificates) is down, you won’t get new projects built. We should have a target, (and ) a timeline that enables you to build wind farms over the next 5-10 years.

Crean said the most vocal criticism was coming from gas-fired generators, who were upset about the fall in the price of wholesale electricity, which was reducing returns or forcing those generators to the sidelines.

“There is concern about low price of wholesale electricity  …. But the  government should be happy about that,” Crean said. Australian wholesale electricity prices, excluding the carbon price, have been at record lows in the last year.

Gas fired generation is being caught out because while wholesale electricity prices are down, the price of gas is rising, as Queensland consumers have discovered in the latest price determination.

“All we are saying is that proportion of renewables must increase if it is going to have positive influence to stabilise green house gas emissions,” he said.

“I think there will always be a place for fossil fuels. But (Australia) needs to get renewables to 20 per cent plus, and world-wide we need to get renewables to 50 per cent plus.”

Crean said investigations were continuing to see whether the proposed 600MW King Island wind farm, which would include an interconnector to the mainland, was economically and financially feasible.

In the meantime, the company was continuing to grow its Momentum Energy retail operation, which had grown more than 10-fold in the last three years and was now contracted to nearly 6,000GWh of clean energy to its customers.

He said the company was looking to expand its products to include energy efficiency, solar PV and battery storage. “We are looking at all of these. You have to be up with the game, and ahead of it,” he said.

Crean said the Musselroe wind farm, which came on stream gradually as each of the 56 turbines were completed from April last year, would operate at a capacity factor of around 45 per cent – quite high for a wind farm. The other wind farms in its portfolio operated at a similar capacity.

The turbines were supplied by Vestas, which has so far provided around one half of the turbines installed in Australia. Danny Nielsen, the acting head of Asia Pacific and China operations for Vestas, said  Australia has attracted more than $18 billion of investment from the RET.

“Investments of this scale don’t just happen by accident,” he said in a statement. “Bipartisan political support at both state and federal level helps create the long-term business certainty that makes major investments like the Musselroe project a reality.”

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7 Comments
  1. wideEyedPupil 6 years ago

    “I think there will always be a place for fossil fuels. But (Australia) needs to get renewables to 20 per cent plus, and world-wide we need to get renewables to 50 per cent plus.”

    Hands in the air if this is the stupidest observation ever from an Australian former Federal Minister who accepts the dangers of Climate Change.

    • RobS 6 years ago

      The fact that a former minister, climate change believer and CEO of Australia’s largest renewable energy company thinks Australia should aim for less than half of the worlds average renewable penetration is staggering.

      • wideEyedPupil 6 years ago

        And the always Fossils comment?! Several countries like Scotland and Norway are already targeting 100% renewables within a decade!

      • wideEyedPupil 6 years ago

        Oh it’s David no Simon… oops. Got it mostly right though anyhow.

        • RobS 6 years ago

          Brother of Simon, Minister in Tasmanian Parliament.

  2. Alen 6 years ago

    ” You have to be up with the game, and ahead of it,” that is a motto that is seriously lost here in Australia. If renewables is the new game why are our leaders considering the reduction of one of the key renewable technology drivers, the RET?

    • RobS 6 years ago

      Because they don’t think renewables are the game, they honestly believe renewables are many times more expensive than fossil fuels with significant externalities like health costs from wind turbine related illness and that they only exist because of government subsidies.

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