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Australian Renewable Energy Suffers Government Letdown

Looks like a downturn for renewable energy in the land down under. Not only did the Australian federal government’s recent decision not to extend mandatory targets for renewable energy production unanimously disappoint supporters of renewable energy, but the inaction has already led to the cancellation of a major wind turbine blade manufacturing plant.

Canberra, Australia – June 16, 2004 [SolarAccess.com] Looks like a downturn for renewable energy in the land down under. Not only did the Australian federal government’s recent decision not to extend mandatory targets for renewable energy production unanimously disappoint supporters of renewable energy, but the inaction has already led to the cancellation of a major wind turbine blade manufacturing plant. The news came via Prime Minster John Howard’s release of the government’s White Paper report “Securing Australia’s Energy Future.” Conspicuously absent in its policy directives was an increase in the Mandatory Renewable Energy Target (MRET). This piece of legislation — requiring the country source a small percentage of power from renewables — is widely cited as the most effective and important catalyst for renewable energy developments in Australia. And its stalling has already proven damaging to renewables. Danish wind turbine giant Vestas told ABC news the company has decided to call off plans to establish a blade manufacturing plant Australia. The company’s CEO, Svend Sigaard, said the government’s inaction on the MRET does not give his company enough confidence in the future of renewable energy in Australia. “We need the long-term stability of the market and with the current perspective, this is not long-term,” Sigaard told ABC news. “It has an effect on Vestas’ plans and these plans will now be reconsidered.” Just about the only thing secure for renewable energy in “Securing Australia’s Energy Future” appears to be the static target itself — at least that’s how one of Australia’s largest renewable energy developers, Pacific Hydro, managed to diplomatically interpret the setback. “Pacific Hydro welcomes the Federal Government’s continued support for the MRET but remains disappointed that the Government has chosen not to increase the current level of 9,500 gigawatt hours of extra renewable electricity per year by 2010, ” said the company in a statement. Digging deep for an optimistic “silver lining,” Pacific Hydro’s Managing Director Jeff Harding said the removal of uncertainty surrounding the Government’s support for the MRET initiative provides Pacific Hydro with a solid platform to continue in its corporate development of wind farms in Australia. “The retention of the current MRET level will underpin the company’s plans to develop 500 to 700 megawatts of wind generation capacity in Australia over the next 4 years. Pacific Hydro is very well positioned to fulfill a major part of the Victorian Government’s target of sourcing up to 1,000 MW of its energy requirements from wind power generation by 2006. While State Governments remain very strongly supportive of the Renewable Energy sector, the Federal Government’s resistance to increasing MRET will result in a significant loss of accelerated Australian regional development opportunities, said Harding. Hydro Tasmania, another of Australia’s leading renewable businesses, was equally dismayed by the news. “The White Paper is a major disappointment and displays a regrettable lack of vision and foresight on the part of the Federal Government,” said Hydro Tasmania’s CEO Geoff Willis. “”We cannot understand why the Federal Government has ignored the recommendations of its own report that called for a higher MRET target. The decision will dramatically reduce future investment in renewable energy across Australia, and Tasmania in particular.” While Hydro Tasmania’s current projects such as Stage 3 of the Woolnorth wind farm and those planned for Heemskirk and Musselroe should be safe, the company said future development locally and interstate will be stalled. At least Hydro Tasmania will have some projects to count on. The same can’t be said for the rest of Australia’s many renewable energy businesses. For that reason, the Australian Business Council for Sustainable Energy’s (BCSE) reaction was much less tempered than Pacific Hydro’s. “Without an increase in MRET there is no strategic framework for growing renewables in Australia,” said Ric Brazzale, Executive Director of the BCSE, the peak industry body for renewable energy representing over 250 sustainable energy companies in Australia. “The emerging domestic industry will stall as a result.” The BCSE sees the “White Paper” tinged with far more “black” than anything else. “The Prime Minister failed to deliver real support for Australian renewable energy, choosing instead to position Australia’s energy future with Australia’s energy past – black coal,” Brazzale said. “It’s a case of “Black to the Future.” The group said the White Paper predominantly delivers huge taxpayer subsidies to the coal industry to help them develop the technology to bury their pollution under the ground. The BCSE said the process known as geo-sequestration is unproven and according to the coal industry’s own document -“Coal 21”- is more than 10 years away from “being technically mature enough for commercial deployment.” Further, geo-sequestration will not apply to any of the existing 30 fossil fuel power stations scattered throughout the country. “By leading with unproven coal technologies, that will have limited application, and not increasing the MRET, the Howard Government is adopting a high-risk approach and jeopardizing the realization of a clean energy future for Australia,” Brazzale said. Pacific Hydro echoed the BCSE’s concerns over coal geo-sequestration funding. The company said they recognize that fossil fuel generation is the major source of energy production in Australia, but are disappointed that it remains virtually the sole serious focus in Australia. “In particular, geo-sequestration is technically uncertain and economically unsupportable for Australia’s existing coal-fired power stations,” Harding said. “The coal industry will be subsidized by tax payers to do what it should be doing anyway, which is to clean up its act. The offer for the taxpayer to pay $1 for every $2 invested in new technologies, such as unproven carbon dioxide sequestration, for example, rewards the polluter. Increasing MRET by contrast would have encouraged investments in new non-polluting projects.” Perhaps most aggravating about the geo-sequestration funding for Australian renewable energy companies is that their own technologies are already mature, proven technologies that could greatly diversify the country’s energy mix. “Our sector is not looking for Government handouts,” Harding said. “We are looking for the Government’s support in the development of a market that has already proven to be viable and which has the potential to grow employment and make a significant economic and environmental contribution to this country.” That opinion was evident in the BCSE’s reaction to one of the White Paper’s few bright spots — new funding for solar demonstration cities. “Solar energy is well past the stage of demonstration,” Brazzale said, “its been operating in Australia for more than 30 years.”