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AGL, Vestas pull out of Vic wind projects: loss of Fed MRET scheme, low electricity-price, blamed

Posted by gmarkets on 10 September, 2007

It had been a stormy few weeks for Australia’s wind industry, with two investors pulling out of wind projects in Victoria, wrote Mathew Murphy and Liz Minchin in The Age (3/9/2007, p.B2). But long-term future looks good: ‘BusinessDay’ asked about a dozen people in the energy and investment industries about the future for wind in Australia, and most of them agreed that while investment uncertainty looked likely to remain an issue for the next few years, the longer-term forecast for wind energy looked more promising. Three weeks ago, Australia’s largest energy retailer, AGL, announced it would not proceed with plans for a 48-turbine wind farm in Dollar, in south Gippsland, which would have contributed 79 megawatts to the Victorian Government’s renewable energy target. Then a week later Danish company Vestas said it was closing its blade manufacturing business in Portland, resulting in the loss of 130 jobs.

MRET loss hurts industry: New wind capacity in Australia had grown at only half the global rate, partly because of our significantly lower electricity prices, but also greater investment uncertainty. Victoria at present had the lion’s share of applications for new turbines due to incentives through its state-based Renewable Energy Target scheme, although that ranking may change with NSW about to set up its own scheme. Wind industry advocates have been quick to blame AGL and Vestas’s decisions on a lack of Federal Government support, due to the phasing out of its Mandatory Renewable Energy Target scheme. It required an additional 9,500 gigawatt hours to be purchased from renewables by 2010, but this supply need had already been filled.

The Age, 3/9/2007, p. B2

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