Wind farm projects in the Canberra region received new hope on Wednesday when ACT Environment Minister Simon Corbell announced a second wind auction would be held this year.
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A number of planned wind farms are unable to move ahead without funding and the news gives them the chance at a guaranteed 20-year contract with the government.
Fairfax Media revealed on Sunday that federal Treasurer Joe Hockey and Finance Minister Mathias Cormann had instructed the Clean Energy Finance Corporation to alter its investment focus to exclude wind farms and all but the largest solar projects, the Coalition has claimed it is steering the CEFC back to its "original mandate".
Prime Minister Tony Abbott has also described wind farms as "visually awful" and has boasted that slashing the federal government's Renewable Energy Target will restrict growth in the industry.
Despite the federal chill towards wind energy, the ACT government appears to be forging ahead with its commitment to the sector.
In February the ACT government signed deals with three wind farms, two in Victoria and one in South Australia, to pay them a set feed-in tariff for the electricity they produce over 20 years. The three have 200 megawatts of capacity and will produce enough power for one third of Canberra's needs.
Mr Corbell said details would be decided within a couple of weeks and bids called within a month or two, but he expected to be auctioning another 200 megawatts from two or three wind farms. The auction was likely to be open to projects from outside the Canberra region, but like last time they would have to bring economic benefits to Canberra and weighting would also be given to their involvement with local communities.
The government had intended to hold its next wind auction next year, but Mr Corbell said it had been brought forward partly to take advantage of the highly competitive market. With the setting of a national renewable energy target, a number of projects would come to the market and the most efficient would be picked up first, he said. The ACT wanted to be in a position to secure those projects.
"Now is a very good time to secure competitive low cost wind projects," he said. "Industry are hungry for certainty and hungry for clear policy direction ... Industry understands our mechanisms, the banks understand our mechanisms and they have confidence to invest in them, so I expect we will get a very strong level of bidding in this next round."
With three wind farms and three solar farms already funded and expected to be operational by 2017 (just one solar farm is operating to date), Mr Corbell said they would produce 65 per cent of the city's energy. The new wind auction would bring Canberra close to meeting its target of 90 per cent renewables by 2020.
By 2020, the projects would cost households an average of $240 extra a year on their bills, but Mr Corbell said that was completely offset by the energy efficiency measures offered to households.
"This is a policy decision to move to renewable electricity supply. There is a modest cost associated with that. There are significant savings being delivered to households as well that offset completely that cost. This is a policy that has no net cost because of the energy efficiency scheme," he said.
He also pointed to the investment in Canberra, with companies establishing headquarters here and funding the country's first trades training course in wind turbine management at the Canberra Institute of Technology, and the first masters course at the Australian National University.
One wind farm had begun construction, another was about to start and the third was close to financial close, Mr Corbell said. The second solar farm, on Mugga Lane, was about to begin construction, and the only hold-ups were with the third solar farm, shifted recently from Uriarra to Williamsdale.
Eighteen wind farms bid in the first auction, including projects in Crookwell, Collector and Bungendore, and the decision to fund farms further afield left the local proponents disappointed.
The government is also assessing 30 expressions of interest submitted last month for 50MW of next-generation solar. Mr Corbell looking for the ability to store solar energy for use at night or at times of little sun, and new technologies such as the "big-dish". The government would decide in the next few months whether to call a competitive auction or negotiate directly, he said.
