The Australian wind energy industry received a major fillip on Tuesday when Origin Energy, announced a power purchase agreement with the 46.5MW Gunning wind farm owned by Spain’s Acciona, the first PPA signed by the country’s largest energy retailer in three years. It’s a small but significant step forward for the local wind energy industry, which has been at a standstill for nearly two years because of the surplus of renewable energy certificates caused by the gross miscalculation over the small scale solar scheme.
That surplus, which has meant most retailers could fill their renewable energy obligations at a cheaper price buying snapping up RECs on the market, is expected to last till around 2014. But Origin’s deal with Acciona, the first since it signed a PPA with the same company for its Waubra wind farm in 2008, confirms our report in early October that negotiations between retailers and developers were intensifying and the price difference was narrowing. Gunning was always likely to be first in line because it is already operating – Acciona had deep enough pockets to arrange merchant finance for the construction – although the terms may still be favourable to Origin – in the first two years of the contract, it is only taking the RECs generated by the wind farm, before a full PPA takes effect for the next 10 years.
The next step for the market is a PPA that triggers a new development. CBD Energy, backed by Chinese wind energy giants, struck an in-principle agreement in October with Neighbourhood Energy, a counterparty it had negotiated to buy. It is also believed that TruEnergy has recently completed a tender for 150MW of wind power and intends to seek bids for a further 200MW next March. The details of those contracts have not been announced, but like the Origin PPA with Acciona, are expected to have come in below $100/MWh. Acciona’s next development is expected to be the 189MW Mt Gellibrand wind farm in Victoria, which needs to begin construction by March, 2012, to meet planning provisions.
CBD changes tack
However, CBD, in a statement issued on Tuesday night, said it has decided not to proceed with the acquisition of Neighbourhood Energy and will instead consider strategies to establish a new retailing business to market its wind and solar products. It said it will fund this strategy from its cash flows and will likely be a more cost effective way to enter the energy retailing market than the proposed acquisition of Neighbourhood Energy.
CBD wants to establish a new energy retailer to create some competitive tension with the big three utilities, and to offer a vehicle to sign PPA’s for wind farms developed by its AusChina Energy joint venture with two of China's largest renewable energy companies.The retailing strategy will be headed by CBD director of strategy and development, Carlo Botto, and Tim Hunt-Smith, who has been CEO of Neighbourhood Energy.
Tall timber
CO2 Australia has been appointed by the Tasmanian government to undertake a forest carbon study to estimate the volume of carbon currently stored in Tasmania’s forest estates. CO2 Group says the study is a critical project for Tasmania ahead of the implementation of a national carbon price next July, which it says may offer significant economic opportunities for the state. For CO2 Group, the new project will help diversify the company's revenue streams, while showcasing its carbon expertise, gathered over seven years operating within domestic and international carbon markets.
"We have some unique experience in forest carbon accounting and assessing the commercial potential for forest carbon projects, all of which align very well with the objectives of this study,” CO2 Group CEO, Andrew Grant, said. The study is looking to provide an independent assessment of the volume of carbon currently stored in Tasmania’s forests, as well as the state's opportunities to use them to reduce greenhouse gas emissions and increase carbon sequestration. It will also look at opportunities for Tasmania to monetise emission reductions in the forest sector.
Loy Yang in your laundry
New analysis from energy research group Energeia has found that off-the-shelf microcombined heat and power (mCHP) technology could meet most of electricity and water heating needs of Australia’s gas-connected households at 25-50 per cent lower carbon emissions. The strategic research report, "Personal Power Stations: The Australian Market for MicroCombined Heat and Power to 2021," says mCHP will start to make economic sense for larger households in NSW and Victoria by 2015. It also finds that by 2021, some 1.5 million households could be financially better off by replacing their mains power and hot water systems with mCHP. “This level of take-up would have a significant impact on carbon, gas and electricity markets and the entire energy industry value chain,” said Energeia’s Managing Director, Ezra Beeman.
Energeia says mCHP gets its low-carbon cred from the high level of efficiency with which it converts gas to electricity (up to 60 per cent, compared to around 35 per cent for power delivered from centralised power stations). The analysis also finds that the overall efficiency for mCHP could be as high as 90 per cent when heat generated is taken into account. The research points to the solid oxide fuel cell (SOFC) as the particlar typr of mCHP technology best suited to "Australian conditions," which is the same technology used by Ceramic Fuel Cells' for its BlueGen range.
“The main barrier to households purchasing mCHP is cost,” said Beeman. “Even in our best case for the technology – a five-person home in Victoria – the household would be out-of-pocket $30,000 for a unit installed today.” Energeia’s investigations also found there was a low level of customer awareness around mCHP, and that mCHP was "unjustifiably" excluded from some government programs intended to support sustainable energy. “This relative disadvantage is set to change,” said Beeman. “A price on carbon will provide relatively greater support for the mCHP market in the longer term.” Energeia also said that it expected environmental policies and lower up-front costs – with growth in overseas markets set to deliver economies-of-scale in production – to shift the economics of mCHP.
The Australian wind energy industry received a major fillip on Tuesday when Origin Energy, announced a power purchase agreement with the 46.5MW Gunning wind farm owned by Spain’s Acciona, the first PPA signed by the country’s largest energy retailer in three years. It’s a small but significant step forward for the local wind energy industry, which has been at a standstill for nearly two years because of the surplus of renewable energy certificates caused by the gross miscalculation over the small scale solar scheme.
That surplus, which has meant most retailers could fill their renewable energy obligations at a cheaper price buying snapping up RECs on the market, is expected to last till around 2014. But Origin’s deal with Acciona, the first since it signed a PPA with the same company for its Waubra wind farm in 2008, confirms our report in early October that negotiations between retailers and developers were intensifying and the price difference was narrowing. Gunning was always likely to be first in line because it is already operating – Acciona had deep enough pockets to arrange merchant finance for the construction – although the terms may still be favourable to Origin – in the first two years of the contract, it is only taking the RECs generated by the wind farm, before a full PPA takes effect for the next 10 years.
The next step for the market is a PPA that triggers a new development. CBD Energy, backed by Chinese wind energy giants, struck an in-principle agreement in October with Neighbourhood Energy, a counterparty it had negotiated to buy. It is also believed that TruEnergy has recently completed a tender for 150MW of wind power and intends to seek bids for a further 200MW next March. The details of those contracts have not been announced, but like the Origin PPA with Acciona, are expected to have come in below $100/MWh. Acciona’s next development is expected to be the 189MW Mt Gellibrand wind farm in Victoria, which needs to begin construction by March, 2012, to meet planning provisions.
CBD changes tack
However, CBD, in a statement issued on Tuesday night, said it has decided not to proceed with the acquisition of Neighbourhood Energy and will instead consider strategies to establish a new retailing business to market its wind and solar products. It said it will fund this strategy from its cash flows and will likely be a more cost effective way to enter the energy retailing market than the proposed acquisition of Neighbourhood Energy.
CBD wants to establish a new energy retailer to create some competitive tension with the big three utilities, and to offer a vehicle to sign PPA’s for wind farms developed by its AusChina Energy joint venture with two of China's largest renewable energy companies.The retailing strategy will be headed by CBD director of strategy and development, Carlo Botto, and Tim Hunt-Smith, who has been CEO of Neighbourhood Energy.
Tall timber
CO2 Australia has been appointed by the Tasmanian government to undertake a forest carbon study to estimate the volume of carbon currently stored in Tasmania’s forest estates. CO2 Group says the study is a critical project for Tasmania ahead of the implementation of a national carbon price next July, which it says may offer significant economic opportunities for the state. For CO2 Group, the new project will help diversify the company's revenue streams, while showcasing its carbon expertise, gathered over seven years operating within domestic and international carbon markets.
"We have some unique experience in forest carbon accounting and assessing the commercial potential for forest carbon projects, all of which align very well with the objectives of this study,” CO2 Group CEO, Andrew Grant, said. The study is looking to provide an independent assessment of the volume of carbon currently stored in Tasmania’s forests, as well as the state's opportunities to use them to reduce greenhouse gas emissions and increase carbon sequestration. It will also look at opportunities for Tasmania to monetise emission reductions in the forest sector.
Loy Yang in your laundry
New analysis from energy research group Energeia has found that off-the-shelf microcombined heat and power (mCHP) technology could meet most of electricity and water heating needs of Australia’s gas-connected households at 25-50 per cent lower carbon emissions. The strategic research report, "Personal Power Stations: The Australian Market for MicroCombined Heat and Power to 2021," says mCHP will start to make economic sense for larger households in NSW and Victoria by 2015. It also finds that by 2021, some 1.5 million households could be financially better off by replacing their mains power and hot water systems with mCHP. “This level of take-up would have a significant impact on carbon, gas and electricity markets and the entire energy industry value chain,” said Energeia’s Managing Director, Ezra Beeman.
Energeia says mCHP gets its low-carbon cred from the high level of efficiency with which it converts gas to electricity (up to 60 per cent, compared to around 35 per cent for power delivered from centralised power stations). The analysis also finds that the overall efficiency for mCHP could be as high as 90 per cent when heat generated is taken into account. The research points to the solid oxide fuel cell (SOFC) as the particlar typr of mCHP technology best suited to "Australian conditions," which is the same technology used by Ceramic Fuel Cells' for its BlueGen range.
“The main barrier to households purchasing mCHP is cost,” said Beeman. “Even in our best case for the technology – a five-person home in Victoria – the household would be out-of-pocket $30,000 for a unit installed today.” Energeia’s investigations also found there was a low level of customer awareness around mCHP, and that mCHP was "unjustifiably" excluded from some government programs intended to support sustainable energy. “This relative disadvantage is set to change,” said Beeman. “A price on carbon will provide relatively greater support for the mCHP market in the longer term.” Energeia also said that it expected environmental policies and lower up-front costs – with growth in overseas markets set to deliver economies-of-scale in production – to shift the economics of mCHP.