By Jason Scott
Nov. 20 (Bloomberg) — Tony Hill moved from inner-city Canberra to a tree-filled valley five years ago to find serenity in the nearby Australian bush. Now he fears his idyllic vista will be marred by 50-storey-high wind turbines.
“The first I heard of it was when I was handed a map that showed my property in the project area,” Hill, 59, said on the back porch of his 100-acre property near the town of Tarago as he points at a ridge 1 kilometer (0.6 miles) away. “If the company gets its way, there will be 10 towers there alone.”
Championed as a tool to cut greenhouse-gases in nations as diverse as Spain and China, windfarms have become contentious in Australia, a country with 9 percent of the world’s black coal reserves. Prime Minister Tony Abbott, who has the backing of the mining industry, plans to slash support for alternative energy that’s helped pump A$20 billion ($17.2 billion) into renewables, including the windfarms that Treasurer Joe Hockey called “appalling” and “utterly offensive.”
“There’s a real concern if personal views of ministers trump evidence-based policy making,” said Frank Jotzo, an associate professor at the Australian National University’s Centre for Climate Economics and Policy. “This government seems determined to dismantle a large part of the policy machinery conceived to achieve domestic emissions reductions.”
Export Earner
Coal is Australia’s second-largest export earner and keeps 55,000 workers in full-time direct employment. Its importance to the economy has made Australia the world’s biggest per-capita emitter of greenhouse gases. Policies by Abbott’s Liberal- National coalition, including scrapping a 30 percent tax on mining profits, have received support from resource companies and lobby groups.
“Mining is a traditional supporter of the coalition and coal is the source of energy that it’s invested a lot of political capital into,” said Zareh Ghazarian, a Melbourne- based professor at the Monash University School of Political and Social Inquiry.
Under Abbott, Australia in July became the first nation to dismantle a levy on carbon emissions. Now the government is trying to pass laws to reduce the 2020 renewable energy target from wind and solar from the current 41,000 gigawatt hours of electricity, enough to power about 5.9 million homes, to between 26,000 and 28,000.
The government says that target introduced in 2009 was designed to reduce reliance on fossil fuels by boosting renewable energy to 20 percent of the electricity market by 2020. Due to shrinking power demand as the energy-intensive manufacturing industry contracts and efficiency improves, that share has already surged toward 26 percent.
Renewable Target
The windfarm industry has been the biggest beneficiary of the renewable target, with more than 1,600 turbines from 68 projects dotting rural landscapes. Wind supplied 4 percent of the nation’s electricity — equivalent to 1.3 million homes — at the end of 2013 with new investment almost doubling last year to A$1.5 billion, according to the Clean Energy Council. The government’s pledge to slash the renewable target has caused investment to dry up, Jotzo said.
General Electric Co., which is building 67 turbines for the Boco Rock windfarm in New South Wales state, may reconsider its plans. The largest U.S. turbine maker has poured $10 billion into renewable energy globally.
“We have invested and would like to continue to invest heavily around the renewable energy target in Australia, but certainty matters and we don’t currently have that,” GE’s Australian managing director of sales and finance, Jason Willoughby, said in an e-mailed response to questions. “These are long-lived investments and companies need a stable policy to have confidence.”
Jupiter Project
A cut to the target may threaten the Tarago project near Tony Hill’s home, according to EPYC Pty Ltd., the Sydney-based, privately-held company that may build as many as 100 turbines, some as high as 170 meters (558 feet), at the site as part of its A$400 million Jupiter project.
“Obviously it would be beneficial to keep the RET,” Shahroo Mohajerani, EPYC’s business development manager, said in a phone interview. “That incentive is attractive.”
The project has already created divisions among Tarago’s population of 350, said Judy Alcock from her real estate office — one of the town’s three shop-fronts open for business.
“People either like it or they don’t, there’s no middle ground,” she said. “Those that are against it feel they may be sold out by those that can generate an income from it.”
‘Beautiful Landscapes’
On hills overlooking Lake George, 20 kilometers from Tarago, stands the Capital Wind Farm — the Infigen Energy-owned project that Treasurer Hockey called “a blight.”
“We get some beautiful landscapes in Australia and frankly putting up those towers is just, to me, quite appalling,” Hockey told business leaders at a Bloomberg event in Sydney in September.
“I don’t worry much about what Joe Hockey thinks because he lives in Sydney,” said Luke Osborne, a fifth-generation farmer who leases his 3,000-hectare property to Infigen, as he drives his electric-powered four-wheel drive around paddocks that hold 27 of the project’s 67 turbines, each 124 meters high.
A “soul-destroying” drought a decade ago, which he believes was exacerbated by climate change, spurred Osborne to investigate hosting a windfarm among his fields holding wheat, canola, beef cattle and fine-wool sheep. The 140-megawatt project now contributes about a third of the property’s revenue — the difference between survival and going under, he said.
Low-Frequency Rumble
Individual farmers earn as much as A$250,000 annually from every 50 megawatts in capacity they host, according to a 2012 Clean Energy Council report.
Provided the project is situated in areas of low density, Osborne believes negative impacts — including the low-frequency rumble the turbines can make in strong breezes or their potential to lower land values — were usually outweighed by the benefits of low-cost, clean electricity.
During his visit to Canberra on Nov. 18, President Xi Jinping oversaw the signing of a document that will showcase Chinese turbine technology at a windfarm project in Tasmania state majority-owned by Shenhua Group Corp. that’s targeting a wind portfolio in Australia of 700 megawatts by 2020.
While Australia’s government says it wants investment in the renewable energy industry to increase, Abbott is also aware that Australian coal exports were worth A$39.8 billion last year and the fuel accounted for 64 percent of the nation’s electricity generation in 2012-13.
Warming Planet
The world must halt fossil-fuel emissions within the next six decades to stave off the irreversible impact that may stem from a warming planet, the United Nations said in its annual “Emissions Gap” report released yesterday. The International Energy Agency estimates that, based on current trends, the world may warm 3.6 degrees Celsius (38.5 Fahrenheit) by the end of the century, raising the risk of more violent storms, drought and rising sea levels.
At the opening of a $3.4 billion coal mine in Queensland state last month, Abbott said coal “is good for humanity.” “Sure, coal is a source of emissions, but it’s also a source of energy and there can be no prosperity without energy.”
Such comments showed the government wasn’t taking climate change as seriously as it should, according to Osborne, who’s also chief operating officer of a Canberra-based startup attempting to improve storage of renewable energy.
“Normal ways of producing electricity are screwing the atmosphere so it’s appropriate for the government to keep providing subsidies to keep this industry going,” Osborne said. – Bloomberg
