Page 2209 - Week 06 - Wednesday, 22 June 2011
Next page . . . . Previous page . . . . Speeches . . . . Contents . . . . Debates(HTML) . . . . PDF . . . . Video
That brings us to the potential impact of this bill on the medium-scale generators. I imagine that one reason why the government may consider not supporting the bill I am tabling today is because of its concern about the medium-scale generators having to share capacity with the micro-scale generators, and that the micro generators will suck capacity away from the medium-scale projects.
It is possible there would be less capacity for medium-scale generators, but I think the government needs to start being realistic about exactly how many medium-scale projects are going to be viable. From everything we are hearing, there are around 12 medium-scale projects on the books. Say they averaged at around 100 kilowatts each, that is 1.2 megawatts of installed capacity out of a potential 15.
Obviously one would hope there would be more projects, but from everything we are hearing, the medium-scale projects have questionable viability. For one thing, connection fees look like they will be a substantial component of the project costs to such an extent that, in spite of community groups wanting to engage in larger projects, we are hearing that they would be grateful to be able to participate in the micro scheme again, which comes without the headache of $60,000 connection fees.
Even large companies are raising eyebrows at the connection fees being in the vicinity of 10 to 20 per cent of the project costs. We must remember that we are talking about investments of hundreds of thousands of dollars, so these are not investors who can just participate for a feel-good reason. They are looking to see real returns on their investments.
That brings me to the point of how the minister determined the rate for the medium-scale generators anyway. This was something we discussed in the estimates process. I know that the ICRC was supposed to investigate what the rate would be, but I still have not been able to find the advice that was provided to the minister. I think in estimates the minister indicated that there was something around, but I have thus far been unable to track it down. If the rate has been set too low, I think we can be sure that there are plenty of other places that people can invest their money for a fairer return.
I do not want this to necessarily be the outcome—that we have no medium-scale projects—but the risk of the government failing to listen to the industry about what incentives it needs and failing to listen to the ICRC about what the premium rate should be means that they may have got this all wrong and are not going to be able to achieve the outcomes that I think we are all looking for.
So let me turn to the specifics of the bill that I have put on the table. The purpose of the bill is to allow micro generators to access the cap that currently applies to the medium-scale generators at the same premium tariff rate. The commencement date of 1 September 2011 is to ensure that the cap is not open to micro renewable energy generators at the new premium rate until three months after the previous micro scheme cap was closed on 31 May this year. This will allow for installations that have been approved as compliant under the previous micro scheme to be connected before the new tariff rate is put in place. However, any installations that are not connected prior to 1 September will receive the lower tariff of 75 per cent of the premium.
Next page . . . . Previous page . . . . Speeches . . . . Contents . . . . Debates(HTML) . . . . PDF . . . . Video