by Andrew Bray, National Coordinator, Australian Wind Alliance
Australia is one of the windiest countries on earth, so it is unsurprising that our wind energy sector has enjoyed a decade of rapid growth, even in the face of a constantly shifting policy landscape. But if we want wind to continue to play a central role in moving Australia to a cleaner energy future, we cannot be complacent – sustained effort will be required to continue to grow this vital industry.
Today, wind is the cheapest source of large-scale renewable energy in the country, and is now equal to hydro power1 in its contribution to renewable energy generation in Australia.
The 82 operational wind farms around the country account for about a third of all the country’s renewable electricity, and five per cent of total electricity generation. This latter figure is set to double by the end of the decade as wind farms that are planned or under construction come online, adding four gigawatts of capacity to the energy grid.
As the pragmatic case for wind energy becomes stronger by the day, recent research conducted by the Australian Wind Alliance has highlighted yet another upside of this renewable energy source: significant financial and social benefits to the regional communities which host wind farms.
We found that wind farm construction has delivered a $4 billion economic boost to regional Australia. The industry has created direct jobs as well as boosted local businesses that supply to the projects, provided much-needed funding to rural areas for infrastructure and community projects, and ultimately, contributed to the resilience of regional areas.
A key mechanism through which this is done is Community Enhancement Funds (CEFs); voluntary payments made by a wind farm to channel funds into community groups, programs and projects. Through these CEFs, wind farms channel between $19 and $21.5 million directly into regional communities every year – money that supports initiatives like vital school bus services, community gardens that feed those in need, and solar hot water, solar panels or energy efficiency measures in rural homes.
When the 14 wind farms currently under construction come online, CEFs will increase to between $30 and $32 million annually, providing valuable support to the volunteer work that is the lifeblood of every regional and rural town.
All in all, over their 25-year lifespan, Australia’s existing wind farms and those under construction could deliver an estimated $10.5 billion to host communities.
These facts speak for themselves: wind energy can provide affordable, clean and renewable energy to Australians on a large scale, and at the same time deliver financial benefits, jobs and other positive social outcomes.
And it’s about to get a lot better. Wind’s viability as a competitive player in Australia’s energy market will only be strengthened as the industry adopts technological advances such as larger turbines, energy storage and frequency control technologies.
Until recently, only coal, gas and hydroelectric power stations have been able to provide frequency control and ancillary services (FCAS), a crucial function which keeps the electrical system at a stable frequency by quickly adding or reducing energy from the grid when necessary.
But in January this year, the Hornsdale Wind Farm, operating alongside the Hornsdale Power Reserve (aka the “Tesla Big Battery”) in South Australia, bid wind power into the FCAS market2, slashing FCAS prices from an expected $9000/MWh to below $300/MWh. This episode should be a shock for the naysayers who continue to underestimate wind’s key role in a reliable, renewable-powered grid. Further trials continue at the Musselroe Wind Farm in Tasmania.
FCAS capability will boost wind energy’s market viability, creating a new revenue stream for wind projects and setting up a virtuous cycle of economic benefits in the sector.
Looking forward, one area that will require constant vigilance from the wind industry is its social licence among the communities that host wind farms.
As more wind farms, with much larger turbines are built throughout rural Australia, it becomes more important to ensure that financial benefits are shared as equitably as possible among host communities. If some parts of the community feel like they’ve got a poor deal, this could result in a shift in public opinion away from wind farms. To avoid this, wind energy companies must continue to do right by the communities in which they operate, engaging early and effectively, and creatively employing benefit sharing opportunities through CEFs, community ownership and investment programs and other corporate responsibility efforts.
Almost as importantly, they must shout their achievements from the rooftops. Acceptance of wind power and acknowledgement of its benefits has been a hard-won fight and has required years of debunking myths about the health impacts of wind and countering “not in my backyard” syndrome – but it’s too early to be complacent.
Wind energy companies need to talk to community members about the impact of CEF-funded projects, and to tell the media and all policymakers – from local councils to federal members – about the positive benefits of wind power.
The wind industry’s social license to operate is a make-or-break asset for its future growth; and companies cannot drop the ball on nurturing and sustaining this goodwill.
One other factor that could knock the wind out of the industry’s proverbial sails is backward-looking government policy. The lack of a commitment to setting a target for renewable energy after 2020, the absence of a plan to increase Australia’s international emissions reduction pledge – which has been widely criticised as inadequate – are deeply concerning.
Supportive government mechanisms such as the Renewable Energy Target (RET) have helped accelerate growth in the renewable industry and brought downward pressure on wholesale power prices. Despite the Abbott government’s three-year halt on new renewables through the RET Review, we are on track to meet the target of having 23.5 per cent of Australia’s electricity generation from renewable sources by 2020.
But what happens next? With no clear target or policy plan to transition Australia towards 100 per cent clean energy, experts predict investment will “fall off a cliff”3, and the industry’s vast potential will remain unrealised. A program to replace our ageing coal-fired sector with renewable energy is needed to drive emissions reduction and ensure that coal workers are given time and support to transition to new, long-lasting renewable energy jobs.
Businesses and state governments are doing what they can to pick up the slack, with ambitious targets at the state level. Commitments such as ACT’s plan to be fully renewable by 2020 and Victoria’s aim to have 40 per cent of its energy from renewables by 2025, mean the states are leading the way.
These commitments show that much higher levels of renewable penetration in the grid are eminently achievable. They also show how paltry the Federal Government’s targets for renewable energy adoption and emissions reductions are. Much higher targets will be required from the Federal Government if Australia is to achieve net zero emissions well before 2050 and fulfil our global climate responsibilities.
Wind power has been a remarkable renewable energy success story in Australia to date, and the sector’s strong economic, environmental and social track record line it up for even greater success.
But this windfall is not a given – it will take sustained and deliberate effort from all of us in the industry, as well as policymakers, to take hold of the breezy future that’s within our reach.