Meridian Energy Australia’s previously delayed Mount Mercer Wind Farm in Victoria nears completion as the forthcoming Renewable Energy Target (RET) review cools industry confidence.
64 wind turbines with a collective capacity of 131 megawatts will be added to the National Electricity Market by midyear thanks to Meridian’s $260 million dollar investment outside of Elaine, Victoria.
The project will result in carbon dioxide emissions reductions of more than 400,000 tonnes per annum, and once complete, according to The Courier, “will generate enough renewable energy to power almost 100,000 homes – or the whole of Ballarat”.
Thus far the development has created more than 250 temporary jobs since construction began in 2012, and will produce a further 20 permanent maintenance positions for the life of the farm. But whether or not such benefits will be able to spread elsewhere relies for now on the outcome of July’s 2014 RET review and any doubts it might seed.
The review, according to a joint statement by Environment Minister Greg Hunter and Minister for Industry Ian Mcfarlane, is set to investigate
“the contribution of the RET in reducing emissions, its impact on electricity prices and energy markets, as well as its costs and benefits for the renewable energy sector, the manufacturing sector and Australian households”.
But renewable energy stakeholders in the industry worry that misleading comments, such as the PM’s assertion of ‘pretty significant price pressure in the system’ (purportedly due to the RET), and the seemingly ideological appointment of unabashed climate sceptic Dick Warburton to the head of the review, signal a foregone conclusion.
In spite of these developments, recent studies, such as the CSIRO’s Future Grid Forum Report in December, remind us that the RET (and state government schemes, e.g. solar feed-in tariffs) only
“[contributed] around 1 cent per kilowatt hour [in the 2012-13 period] (although the RET has had the counteracting effect of lowering wholesale prices)”.
With a report commissioned by Meridian and its subsidiary Powershop adding that
“costs imposed on retailers by the RET are outweighed by the benefits they receive from the impact of lower wholesale costs. Consumers should see no impact on their bills from LRET and if they are, it can only be because retailers are attempting to pass through their gross costs of the scheme without accounting for the net benefits as well”.
Elsewhere, the value of these benefits – when not passed on to the consumer – has been estimated to comprise around 3 per cent of our electricity bills, with the variance determined mostly by state.
Problematically, information that runs counter to these facts has undermined certainty in the industry, which in turn is either delaying or preventing future developments – an effect exacerbated by the proximity of the most recent review to the last. This factor has been acknowledged by the Climate Change Authority in its 2012 RET review in which it recommended waiting four years to undertake the next study – a suggestion the Labor government ignored.
Consequently, Meridian CEO Mark Binns told the Climate Spectator that:
“We won’t invest further before the regulatory situation in Australia becomes clearer”
In order for Australia citizens to avoid such uncertainty and continue to reap the benefits of the lowered wholesale prices, reduction in greenhouse gas emissions, and the stimulation of regional job and sectoral growth associated with the RET, such as those seen from projects like Meridian’s Mt Mercer Wind Farm, the certainty of the target must be assured.
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