Market Evidence Disputes Origin’s Facts
20 March 2013
Infigen Energy’s Managing Director and CEO Mr Miles George presented at the Energy 2013 conference in Sydney today.
In his address Mr George has rebutted assertions made by Origin Energy earlier this week in relation to wind power and the renewable energy target.
“In a world where facts are increasingly being invented I also like to support my facts with evidence,” said Mr George.
“It is a fact that Origin is a massive multi-billion dollar gas play, and it is Mr King’s job to do everything he can to advance the interests of, and prospects for its gas investments. There is no question that Mr King is world class in that regard. However that should not bestow upon Mr King the right to have his opinion projected as fact, especially in light of the contradicting domestic and global evidence,” he said.
“It is a fact that wind farms are typically supported by the vast majority of the local communities where wind farms are located.”
“Independent studies conducted by the Climate Change Authority, among others, have found that increased levels of renewable energy will in fact displace coal fired generation, after gas exporters, including Origin, price themselves out of the domestic electricity generation market.”
“The fact is that South Australia has achieved over 25% of its electricity from wind energy without adding a single megawatt of open cycle gas generation to provide reliability,” said Mr George.
“According to AEMO the fact is that the increased level of wind energy deployment in South Australia has actually reduced the occurrence of high priced volatility events in the electricity system. And perhaps most importantly the wholesale cost of electricity has actually reduced as a result of wind energy deployment with its near zero short run marginal cost,” he said.
It is also important to remember that the renewable energy target was established by a Liberal Government not only to reduce emissions but to promote the development of the renewable energy industry in Australia.
The fact is that wind farms are an excellent provider of carbon emission free electrical energy to the grid and comparing a wind farm to a diesel peaker or coal fired power station is akin to comparing an America’s cup yacht to a Jet Ski or an oil tanker. Each serves a different purpose and is effective when deployed for that purpose.
“A wind farm delivers cheap clean energy when the wind blows, a diesel peaker delivers expensive fossil energy when consumers demand it. As we decarbonise our generation fleet these technologies will combine with others to deliver the least cost solution to the end customer,” said Mr George.
“Origin has chosen not to go down a path of commitment that would underwrite a smooth new build schedule for renewable energy, instead choosing to use its dominant market position, and the political clout that goes with that status, to browbeat the Australian parliament into a watering down of its obligations under the RET legislation. Will our Parliament, however it is settled in September, really allow the national interest to be captured in this way?” he said.
The independent Climate Change Authority undertook substantial consultation and commissioned expert studies in its review of the renewable energy target and largely recommended no change to the scheme, highlighting the need to provide investors with certainty. Every interested party, including Origin, had an opportunity to make its case to the Authority and it is a disservice to the Authority to suggest that it “skipped an opportunity to review the true cost of the scheme”.
“I have every confidence that the CCA undertook a thorough review and used all the available evidence in making its determination, including any evidence provided by Origin,” said Mr George.
A copy of the presentation is available here.
About Infigen Energy
Infigen Energy is a specialist renewable energy business. We have interests in 24 wind farms across Australia and the United States. With a total installed capacity in excess of 1,600MW (on an equity interest basis), we currently generate enough renewable energy per year to power over half a million households.
As a fully integrated renewable energy business inAustralia, we develop, build, own and operate energy generation assets and directly manage the sale of the electricity that we produce to a range of customers in the wholesale market.
Infigen Energy trades on the Australian Securities Exchange under the code IFN.