Victoria in top spot for green funds
By Mathew Murphy | theage.com.au | 17 November
The report by professional advisory firm Ernst & Young into the Federal Government's Mandatory Renewable Energy Target scheme tips investment in the sector to soar to $2.3 billion a year by 2020. Only $3 billion has been invested in renewable energy in Australia since the scheme was introduced eight years ago.
Under the scheme, electricity retailers must supply 20% of required power from renewable resources by 2020.
Electricity retailers will be fined about $57 for every megawatt/hour they are short of the target.
The report, entitled 20-20 vision: Investment challenges and opportunities arising from Australia's 20% renewable energy target, lists Victoria as the "all-round quality performer" because of its favourable renewable investment environment.
Victoria was judged to have:
- The most active state government in supporting renewable energy
- An open, liberalised electricity market regulatory regime
- Good-quality grid infrastructure near high-quality wind resources
However, as electricity prices can differ by more than 25% between states and as up to 60% of a renewable energy project's revenue comes from the electricity they produce, Victoria's relatively low cost of electricity has proved the biggest hurdle for investors.
Western Australia is the most attractive state for large-scale projects in the short term, according to the report, because of excellent renewable resources and planned upgrades to transmission lines.
NSW is tipped to be on the verge of a renewable energy boom, while Tasmania is judged to have "arguably the best large-scale renewable energy resources" despite its small electricity market.
Queensland is described as having "unfulfilled potential" and South Australia, despite having attracted more than half the renewable energy investment to date, will become less attractive because it requires major upgrades to transmission lines.
Ernst & Young partner Jon Dobell said uncertainty over interim targets had temporarily stalled investment, but further guidance from the Federal Government and the introduction of its carbon pollution reduction scheme would provide a stimulus.
"As underlying electricity prices increase due to emissions trading, it potentially allows the viability threshold for renewable energy projects to also go up," he said.
First published by TheAge.com.au on November 17 2008
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