Letter: Renewable Decision Sought
26 March 2015
The Lake Bonney wind farm has been the largest single investment in the South East region for a decade.
Infigen Energy has spent about $700 million on the three stages of the project, with roughly half of that investment going into Australian goods and services.
The project includes towers fabricated by Keppel Prince at Portland, transformers from Wilson Transformers and cabling from Nexans Olex manufactured in Australia, as well as design work and civil, mechanical and electrical works at the site and at the substation.
Infigen Energy employed about 200 people over the six years of construction to build the three stages of the project. In addition we (and Vestas) currently employ 20 people directly at the site, as well as 25 local contractors and part-time workers.
We also contribute approximately $750,000 per annum to the local economy through rental payments to the 24 local families who host our wind turbines on their properties.
These substantial benefits for the local economy have been driven by Australia’s Renewable Energy Target (RET) legislation.
That legislation was introduced by the Howard government in 2000 and was the driver for Infigen to substantially develop the first stage of the project in the following two years and thereafter commence construction in 2003.
The RET has been a successful scheme and for good reason has enjoyed bipartisan support at the federal level since that time. The RET scheme was supported by both major parties in the lead-up to the 2013 federal election.
The RET and large scale renewable energy industry have been under a dark cloud since the Federal Government instigated a review in February last year. While the review was completed in August last year, there has still been no definitive outcome and a freeze in investment under the scheme continues to this day.
Prospective projects such as Infigen Energy’s Woakwine wind farm to the north of the Lake Bonney project through to Mount Benson have been put on the backburner.
That project offers similar benefits to the local economy as our Lake Bonney project.
This freeze in large scale renewable energy investment has occurred around the country, with the result that around $1 billion per annum of investment in Australian goods and services has now completely stopped.
Bloomberg recently reported that Australia-wide investment in the large scale element of the RET scheme has dropped from over $2 billion per annum in the years 2011 to 2013 to only $240 million in 2014. Roughly half of that pent-up amount of $1 billion per annum could be going into Australian goods and services, and of course jobs in regional areas, right now.
So why are we in this situation?
The main finding of the Warburton review was that contrary to the arguments of the big three power retailers who dominate Australia’s electricity retailing and generation industries, the RET scheme actually helps to reduce pressure on power bills in the medium to long term.
This is because renewable energy helps keep wholesale power prices down as our “fuel” is free. That impact more than offsets the cost to electricity retailers of buying renewable energy certificates under the scheme. The result in a properly functioning competitive market is that prices will be lower for electricity consumers.
Not surprisingly then the Warburton report also noted that cutting the RET would actually increase power bills for consumers in the medium to long term.
Our industry’s opponents, led by the big three power companies whose power generation and retailing profits are under threat, have said that the RET must be cut or the “big three” will simply refuse to abide by the scheme until the scheme “breaks”, to use their terminology.
The RET impasse has gone on way too long now.
We should not accept that investment in large scale renewable energy and the national interest objectives of the RET scheme are being held to ransom by the interests of the big three power retailing oligopoly.
A negotiated deal between the government and Labor on the RET is now in prospect for the next parliamentary sitting this month.
Infigen Energy greatly appreciates the support received from many people in the South East region for a speedy resolution to the long-running RET impasse.