Giles Parkinson at The Climate Spectator has a look at wind farm developments in Australia - The wind farm that ate the RET

In Australia’s renewable energy market, fortune favours the quick and the big. The $1 billion Macarthur wind farm to be built in south-western Victoria is being touted as the most significant renewable energy project in Australia since the Snowy Hydro. But don’t expect another project of similar ambition to follow anytime soon, even though there are a couple on the drawing board – there’s simply no room left in the market.

Macarthur has been a long time in the planning for AGL, it’s just been waiting for the opportunity provided by the passage of the Renewable Energy Target.

Just over a year ago, AGL suggested Macarthur would be around 330MW-360MW, but improving technology and the opportunity provided by the passage of the RET means it has been able to upgrade the size of the facility by a quarter over its original estimates.

Instead of using 2.1MW turbines it has used elsewhere, AGL announced on Thursday that it will use new model 3MW turbines manufactured by Vestas, enabling it to boost the size of the plant [to] 420MW and reduce the number of turbines to 140 from 174, providing a significant saving in operating costs.

That’s terrific news for AGL and its joint partner in the project, Meridian Energy, and for its suppliers and contractors Vestas and Leighton; but not so good for others, particularly the independent developers who are finding it difficult to get long-term power purchase agreements to satisfy their financiers.

In a single bound, the Macarthur wind farm takes the size of the committed wind farm pipeline to more than 1000MW. Wilson HTM analyst Jenny Cosgrove says the size of this pipeline – another 150MW from two projects due to be completed this year, another 382MW from five projects in 2011, and the 203MW Collgar wind farm in WA in 2012 – means that the price of renewable energy certificates could remain at current levels of $40/MWh for longer than expected. That’s not enough to get most projects off the ground.

Cosgrove says the wind farm pipeline means that LRET is rapidly approaching a balance of supply and demand in 2011-2013, and this is before the excess current banked supply of small-scale RECs, which she estimates to be more than 21 million by end 2010, is transferred into the large-scale RET.

“It will take a number of years before this excess supply is absorbed,” says Cosgrove. Which means that many other wind farms currently in the planning stage may struggle for a window of opportunity, of even financing, for a few years yet. ...

The real test of that estimation will come in years 2016 and beyond, when the RET target will scale up dramatically towards it 2020 target of 41 million MWh. By then, wind might have some serious competition from solar thermal, if Lend Lease is right about the pricing of solar PV, as well as some geothermal projects.

The Business Spectator has an article by Giles Parkinson on the government finally legislating an increase in the renewable energy target - Our renewables 'revolution' is not what it seems.

It has taken nearly three years, but the federal government finally has something to show for the climate and clean energy platform it took to the electorate in 2007.

The passage of amendments to the Renewable Energy Target after a series of last gasp negotiations with the opposition and the Greens (a sign of things to come, perhaps), means that billions of dollars of wind farm and other renewable investments should – in theory at least – now get the green light. It also means that Australia can now join the rest of the world and declare it has a renewable energy industry to call its own. It’s been a long time coming.

Having cut and run from an emissions trading scheme and blundered its way through the home insulation disaster, that would be a welcome development for the government, and paves the way for a host of photo opportunities for government ministers and wind turbines, solar panels and sugar mills.

But not so fast – one of the consequences of the government’s poorly conceived first attempt at the RET is that the market remains flooded by certificates issued firstly to solar hot water systems and then to rooftop solar panels.

The price of RECs remains below $40, way below the value necessary to support most wind farm developments, and some predict the market may remain flooded till 2014, because energy retailers have been stocking up while the price is cheap.

That means that power purchase agreements needed to finance big projects will be hard to come by, in the short time at least, and some developments will have to bide their time. Others, though, such as AGL’s $800 million Macarthur wind farm and up to $2 billion of other wind farm projects in coming years, will not be delayed, because AGL can use the RECS to satisfy its own obligations.

One of the great ironies of this piece of legislation is that it should make its way through parliament while the emissions trading scheme failed. After all, it prices saved emissions, at least on paper, at up to $65 a tonne, three times more than an ETS.

It’s the sort of maths that drives some companies, such as aspiring coal seam gas developers Origin and Santos, to the point of distraction. Both argue that they need a carbon price to make baseload power stations economically viable. There’s another $20 billion to $30 billion of investments in that pipeline.

And it seems that for every winner in a renewable energy scheme, there is a loser. Now it is the turn of the solar industry to lament the agreements that effectively restrain the growth of the industry. Austalia’s reliance on a single mechanism means its impossible to find the right balance.

AGL Energy Limited (AGL) plans to fast track its Macarthur wind farm project following changes to the Renewable Energy Target (RET) scheme approved by the Senate on Wednesday. The government's changes provide greater investment certainty for the renewable industry, AGL said in a statement on Thursday. ...

The government's changes have split the RET into two, effectively creating two markets - one for large-scale industry and one for small-scale consumer technology including solar photovoltaic.

AGL managing director Michael Fraser said it would give industry the certainty to make long-term investment decisions to transform the nations energy infrastructure to meet the target of sourcing 20 per cent of the nations electricity from renewable sources by 2020.

The SMH reports that the increased mandatory renewable energy target being proposed for Australia is likely to have minimal cost to consumers and win multi-partisan support in Parliament - Power bills will not bear cost of clean power boom.

A RENEWABLE energy scheme before the Federal Parliament will drive $14 billion of clean power investment by 2020 according to new modelling, but the head of the Climate Change Department has warned that Australia still cannot meet its promised emission reduction targets without a broad price on carbon.

Modelling released by the government yesterday shows the new renewable energy target - which requires 20 per cent of energy to be sourced from renewables by 2020 - will increase the average household power bill by $41 a year. The scheme amendments before the Parliament will be responsible for just $2 of that.

The modest price rises mean it is likely the changes will pass with bipartisan support, as the original renewable energy target legislation did, allowing billions of dollars of renewables investment to begin.