Antinuclear

Australia’s big utility industries holding back renewable energy development

frustration from having its wind farm development options restricted by the dominance of the big three energy utilities.

 the secretary of the Department of Energy, Drew Clarke, conceded that the market power of the three big retailers and their impact on the deployment of large scale renewables was an issue that was being monitored.

Big three utilities hindering renewable energy, BY:GILES PARKINSON, :The Australian , March 02, 2012  AFTER spending more than three years waiting for Australia’s dominant energy utilities to sign contracts to build new wind farms, the country’s largest renewable energy developers have decided to take matters into their own hands and write the contracts themselves.

The announcement by Pacific Hydro last week that it would establish its own energy retailer by July 1 was driven primarily by its immediate need to find an off-take agreement for the power to be generated by the 150MW Moree Solar Farm.

Without it, the consortium in which PacHydro is involved had little chance of retaining the tender for the Solar Flagships project. But the decision to push into retailing has been brewing for some time and could provide some interesting dynamics as Australia embarks on a $20 billion-plus spend to meet the country’s 20 per cent renewable energy target by 2020.

According to Lane Crockett, the company’s general manager in Australia, the proposal was approved by the board in October, borne out of frustration from having its wind farm development options restricted by the dominance of the big three energy utilities.

The renewable energy target legislation puts the obligation on meeting the 20 per cent on energy retailers, who must source that portion of green energy from developers, build their own or pay a penalty price.

Because of the surplus in renewable energy certificates created by poorly managed rooftop solar incentives, the retailers have simply had to buy RECs on market and have had little interest or motivation to commission new wind farms.

But Crockett says the retailers could and should be showing more urgency. “We all understand that there has been an oversupply of RECs in the market,” he says.

“And we all know that they will wash through the market by 2014, 2015 or 2016. Now is a fabulous time to contract: the price of turbines is low and the Australian dollar is high. You are not going to get better PPA (power purchase agreement) prices. Yet there is still a reluctance by those people to contract.”

The issue was raised in Senate Estimates hearings last month when the secretary of the Department of Energy, Drew Clarke, conceded that the market power of the three big retailers and their impact on the deployment of large scale renewables was an issue that was being monitored.

It’s not just the flagships programs that are being affected. There is concern in some quarters that further delays in awarding PPAs — but the utilities may justify this through the surplus of RECs — will make it difficult to build enough wind turbines or solar farms in time to meet the target, and it is thought that at least one big utility has been quietly pushing for a change.

The push by PacHydro and others into the retail sector, and effectively position themselves as vertically integrated companies, is the renewable energy industry’s response……..

The new PacHydro venture will not be targeting the retail market but commercial customers who may be looking for a greater proportion of green energy to reduce emissions or to be “socially responsible” or, in the case of solar PV, may be seeking cheaper sources of power for their daytime industrial operations……. http://www.theaustralian.com.au/business/opinion/big-three-utilities-hindering-renewable-energy/story-e6frg9if-1226286656625

March 2, 2012 - Posted by Christina Macpherson | AUSTRALIA - NATIONAL, energy