Australian Broadcasting Corporation


LOCATION: http://www.abc.net.au/7.30/content/2006/s1695540.htm

Broadcast: 24/07/2006

States begin setting own greenhouse targets

Reporter: Kerry Brewster

KERRY O'BRIEN: As the Prime Minister continues to entertain the possibility of nuclear power as part of Australia's response to the looming greenhouse threat. The states are starting to set their own challenges. Victoria plans, within a decade, to generate 10 per cent of its power from renewable sources such as wind turbines. And a month ago, the South Australian Government announced, or introduced legislation which requires 20 per cent of the State's electricity to be generated by renewable energy within eight years. The Federal Government, meanwhile, has decided against raising the national renewable energy target, and one federal minister has publicly derided wind farms as "expensive white elephants". But other countries foresee a vital role for wind power, and the local wind power industry claims the lack of support at home is already driving Australian jobs and know-how offshore. Kerry Brewster tests the claims and counterclaims.

KERRY BREWSTER: The wind-swept edge of western Tasmania, where the Roaring 40s hit the coast. Six weeks ago, this was to be the site of Australia's biggest wind farm yet, with turbines generating electricity to power 68,000 homes. Then its backers pulled the pin.

MARK KELLEHER, DIRECTOR, ROARING 40S RENEWABLE ENERGY PTY LTD: It was either basically close down or go overseas.

KERRY BREWSTER: Mark Kelleher founded the Roaring 40s energy company, now proudly doing business not in Australia, but China.

MARK KELLEHER: It is indeed a great pleasure to be here today in Beijing.

KERRY BREWSTER: Roaring 40s will build two huge wind farms here this year, with more deals in the pipeline. China's the world's fastest growing energy consumer. To offset its soaring CO2 emissions it has set a 15 per cent renewable energy target by 2015 and it's in a rush to meet it.

MARK KELLEHER: Just the wind alone, that means about the same as Australia's total electricity supply, just from wind. So it's a huge market for us.

KERRY BREWSTER: But in Australia, the industry is at a cliff edge. Two million extra Australian homes would have been powered by farms like this, but that was before the Federal Government hit the brakes on the Mandatory Target for Renewable Energy, or MRET.

SENATOR ERIC ABETZ, LIBERAL MP: Increasing the MRET target would impose significant costs through higher electricity prices in Australia.

KERRY BREWSTER: MRET had been the mechanism by which Australia's wind industry had flourished. Under it, energy retailers had to buy around 1 per cent of their power from renewable sources. The Government's decision not to raise the amount went against the recommendation of its own formal review of the policy, the Tambling Inquiry which in 2004 urged a doubling of the target. It's a decision that's already driving investment, jobs and Australian know-how offshore.

SENATOR CHRISTINE MILNE, GREENS MP: I rise tonight to express my great disappointment...

KERRY BREWSTER: In Parliament, Greens' Senator Christine Milne described the bill as a tragedy.

SENATOR CHRISTINE MILNE: We're going to see a loss of investment, we're going to see more jobs and more technologies going overseas and we're going to struggle to meet our own greenhouse gas emission target. It's a lose, lose, lose situation.

SENATOR IAN CAMPBELL, ENVIRONMENT MINISTER: Quite frankly what a wonderful thing for a policy to create a domestic industry and see it exported around the world. That's a good thing not a bad thing.

ANDREW RICHARDS, PACIFIC HYDRO LTD: We're an Australian company we want to invest in Australia but we can't at the moment because there's no mechanism to help us do that. There's no mechanism that levels the playing field between clean energy and dirty energy.

KERRY BREWSTER: Andrew Richards runs Pacific Hydro, an Australian energy company that built three wind farms in Victoria, before heading offshore to California, Chile and the Philippines.

ANDREW RICHARDS: We would have invested over the next five years a further $2 billion on clean green infrastructure in Australia.

KERRY BREWSTER: That's a lot of money.

ANDREW RICHARDS: It is, it is.

KERRY BREWSTER: How many jobs would that have created?

ANDREW RICHARDS: If it was all in wind energy there would have been several hundred additional jobs created in manufacturing alone. Our company would have expanded its Australian operations. It would have delivered tens of millions of dollars to local farmers by way of landholder payments.

PETER MCGAURAN, AGRICULTURE MINISTER: There are many industries we could keep in Australia with a taxpayer subsidy and as a result, if those companies decide there are countries in the world that will pay dearly for their services, so be it.

KERRY BREWSTER: Agriculture Minister Peter McGauran is a vociferous critic of Australia's wind farm industry.

PETER MCGAURAN: They go in, divide communities, devalue properties, scar the landscape. There's no justification for them.

KERRY BREWSTER: With abundant Australian coal producing some of the cheapest electricity in the world, wind energy is too expensive. That was the message Roaring 40s' Mark Kelleher and Tasmania's Energy Minister David Llewellyn received in Canberra from Industry Minister Ian Macfarlane.

IAN MACFARLANE: No-one can argue $5.5 billion over 20 years is an enormous cost to Australian industry to stump up to.

KERRY BREWSTER: Roaring 40s had proposed another wind farm at Musselroe on Tasmania's East Coast. Now, its 150 construction jobs may be the first casualties of the Government's decision.

DAVID LLEWELLYN, TASMANIAN ENERGY MINISTER: It's probably the best wind project in Australia. If it can't come on line then obviously no other wind energy project in Australia will get up.

SENATOR CHRISTINE MILNE: The economists are not taking into account the real costs of carbon. If you actually put a price on greenhouse gas emissions on carbon dioxide, if we had a carbon tax or carbon emissions trading in this country, what we would see is all of the renewables come into their own.

KERRY BREWSTER: But to Minister McGauran, an Australian carbon tax is lunacy.

PETER MCGAURAN: What we need is a heavier investment still by all governments into clean coal technology. There is a way forward. We have the cheapest and best resource in the world in Australia and we must make more of it.

KERRY BREWSTER: No-one denies the success of the Mandatory Target for Renewable Energy target. It was virtually met last year, five years ahead of schedule. In fact, it was too successful. According to the leaked notes of a senior executive of Rio Tinto, Industry Minister Ian Macfarlane told a secret gathering of the CEOs of major fossil fuel companies in 2004 that the scheme "worked too well", that "investment in renewables was running ahead of the original planning", and that the "very vocal" renewables industry had taken the agenda from them. Ian Macfarlane declined to be interviewed for this story.

SENATOR CHRISTINE MILNE: It's very clear to me that the coal industry has huge sway over the Australian Government and when we talk about renewables, all the Government can think about is trying to get into carbon sequestration and storage which effectively allows the coal industry to continue its business as usual.

PETER MCGAURAN: These alternative energy sources can't be expected to be paid for by the taxpayer to the benefit of an increasing number of investors and entrepreneurs forever into the future.

KERRY BREWSTER: Last week, the Victorian Government stepped into the breach, announcing it will go it alone with its own mandatory renewable target of 10 per cent by 2016.

STEVE BRACK, VICTORIAN PREMIER: We've actually taken up responsibility which we expected the Federal Government to undertake.

KERRY BREWSTER: It means more wind farms and more jobs for Victoria at least, and Pacific Hydro will be one of the first companies to benefit.

ANDREW RICHARDS: It will certainly help those companies that are active in Victoria, but there are substantial opportunities in other States that could be realised. South Australia, for example, has huge potential in renewable energy. NSW, Western Australia - without any kind of legislative framework in those States or a cohesive national approach, then those investments won't be realised and that's the great shame.

KERRY BREWSTER: So, Roaring 40s' wind projects for Tasmania and South Australia will stay on the drawing board, though Mark Kelleher remains hopeful his company has an energetic future not only in China, but in Australia as well.

MARK KELLEHER: Now's the opportunity and now's a closing window, because if things aren't done in the next six to 12 months, the support industries and the manufacturers will have gone.