Australia’s renewables plan hits community opposition

Melbourne — Australia’s plans to overhaul its strained power grid are running into community protests that threaten to slow investments in wind and solar farms needed to replace retiring coal-fired power generation over the next 25 years.

The industry needs to raise more awareness of the benefits to communities, come up with incentives to encourage the development of backup for renewables and speed up projects to beat rising costs, energy executives and regulators said on Tuesday.

The challenges come as Australia suffers a power and gas crunch due to coal-fired power outages and coal supply problems which have highlighted the need for a more rapid but carefully managed transition to cleaner energy.

The country’s new Labor government plans to provide A$20bn ($14.4bn) in cheap finance to unleash a further A$58bn in private investment to build 10,000km of transmission lines to areas where wind and solar farms are being built.

The new transmission will be needed for the 140 gigawatts of renewable generation that the energy market operator estimates will be needed by 2050 — about nine times the renewable capacity now.

However, the first new transmission project in 30 years — the Western Victoria Transmission Network Project — proposed by AusNet, is facing protests from farmers.

“What we’re seeing is that local communities are upset, that their concerns weren’t heard early enough,” Daniel Westerman, CEO of the Australian Energy Market Operator, told the Australian Energy Week conference.

Another company, Transgrid, looking to build the VNI West project to beef up transmission between the states of Victoria and New South Wales, highlighted the need to pace what will be several years of construction on transmission projects.

“We’re going into a period of a lot of supply constraints around labour and materials,” said Transgrid CEO Brett Redman. “Until we’re built, a lot of those grid-scale renewables can’t be built.”

Another hurdle is the slow approval process for transmission projects, in which regulators determine whether a project should go ahead and how much of its costs can be passed through in tariffs.

While several projects have been proposed, only one, the A$3.5bn Marinus Link project between the island of Tasmania and the mainland, has received approval so far.

To back up all the new renewable capacity, 60GW of so-called firming capacity, or three times the backup capacity in the market today, will be needed when there isn’t any sunshine or wind.

To encourage development of that firming capacity, regulators and industry agree a “capacity market” is needed, which would reward those who have power available for dispatch at any time.

Regulators’ recommendations last year for a capacity market ran into opposition from those who see it extending the life of fossil-fuelled power, currently the main backup for renewables.

“A capacity mechanism is a critical part of making sure we’ve got sufficient investment in dispatchable capacity ... to keep the lights on, to keep prices low and support the energy transition,” Australian Energy Regulator chair Clare Savage said.

Reuters