Victoria is likely to be a major beneficiary of the new mandatory renewable energy target, according to an assessment of wind energy prospects by Australia's electricity generation industry.
In a presentation to a New South Wales energy conference, the National Generators Forum has estimated that the expanded MRET to be introduced by the Rudd Government may require as much as 5,000 megawatts of wind capacity to be developed in Victoria.
The Government's policy requires 20 percent of national electricity consumption to be sourced from renewable energy by 2020.
The NGF estimates that this will require 60,000 gigawatt hours of power to come from renewable energy in 2020. Of this, it says, 15,000 GWh can be sourced from existing renewable projects, almost all hydro-electric. Another 9,500 GWh will come from projects developed under the Howard Government's MRET. This leaves 35,500 GWh to be provided annually from 2020 from new renewable sources.
The NGF believes that the additional power will be provided mainly from wind energy, with some contribution from geothermal sources towards 2020. This, it says, will require construction of between 10,000 and 15,000 megawatts of wind power. Based on the use of 2MW systems, adds the NGF, this will require between 5,000 and 7,000 turbines to be installed across Australia.
The NGF sees little scope for wind farm development in Queensland and believes that Victoria and South Australia will each provide 5,000 MW of wind capacity, with whatever balance is needed being built in Tasmania, New South Wales and Western Australia.
The 2007 Energy Supply Association yearbook lists 132.7 MW of energy being operational in five wind farms in Victoria and lists another 1,402 MW of capacity in 10 wind farms being under development or in the planning process. On the NGF estimates, this still leaves scope for development of more than 3,500 MW of additional capacity in the State over the next 12 years.
The Generators Forum says the wind farms will be distributed across a wide geographical area on the southern coast of Australia and it suggests that this will raise technical issues for the existing high voltage transmission, which has been designed to deliver electricity from large power stations to urban areas.
The NGF argues that there is a need to re-examine the national electricity market's transmission congestion management arrangements and that there will be a requirement for "greatly expanded" standby capacity. This, it adds, raises the issue of the introduction of standby capacity payments.
The Rudd Government has agreed a development plan for introduction of the new MRET with the States through the Council of Australian Governments. It involves a CoAG committee presenting a scheme design to the Council at its September meeting and for regulations for the new MRET to be ready early next year.
Rod Gillam leads the firm's energy law practice and he has extensive experience in advising a range of energy industry participants on a large number of significant commercial matters including acquisitions, regulatory compliance, connection agreements, power purchase agreements and ISDA contracts.
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