Page 5533 - Week 13 - Thursday, 17 November 2011
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elicit the best feed-in tariffs the market can offer. The government can then ensure that any entitlement granted to a large-scale renewable energy project developer represents a fair market price and value for money for the community.
The other important dimension to this legislation is that it provides developers with certainty as to their revenue over the life of the generation asset. The structure of the feed-in tariff ensures that rather than developers receiving windfall gains due to expected future increases in wholesale electricity prices, any such gains will be received by the ACT community in the form of reduced price support payments. By providing revenue certainty to the project developer, the legislation reduces market risk and cost for capital and ultimately delivers lower costs of generation to the community.
I am also pleased to table today a draft instrument which would establish, under the Electricity Feed-in (Large-scale Renewable Energy Generation) Act, the first competitive auction process for the development of up to 40 megawatts of solar renewable energy capacity within the ACT. I table the following paper:
Electricity Feed-in (Large-scale Renewable Energy Generation) FiT Capacity Release Determination 2011—Draft disallowable instrument.
In tabling the amendments to the legislation in February this year, Minister Corbell also noted the government was keen for investment in larger scale generation, because that is where the most efficient generation is. That is where the real opportunities are to make Canberra the solar capital of Australia and, importantly, to achieve the greatest level of abatement from our investment.
This bill enables those benefits to be achieved and confirms our commitment to a cleaner and more sustainable future. These commitments to large-scale renewable energy generation and solar energy in particular are also reflected in the government’s recently released sustainable energy policy. Forty megawatts of solar energy generation capacity should generate up to 56,064 megawatt hours each year, enough to power 6,900 Canberra homes. And this will, over the life of the scheme, avoid 850,000 tonnes of greenhouse gas emissions. There is no doubt that 40 megawatts of solar energy generation capacity will make the ACT Australia’s solar capital. On a per capita basis, we will be comparable with Germany, which is generally recognised as being the world’s leading solar proponent.
As I am sure members are aware, the cost of solar generation technologies has come down substantially in recent years due to high demand and new economies of scale being achieved in production. This, combined with a strong Australian dollar, provides an opportunity to bring forward a robust competition to determine solar energy’s current market price. A comprehensive package of information is being prepared for industry, to be released at the commencement of the auction. Indeed, through an industry briefing process undertaken earlier this year, the government is already aware of strong local and international interest. Following the first auction process, we will have firm information about the prospects for solar energy contributing further to our energy generation mix and its cost. The legislation itself, however, provides flexibility to pursue other renewable energy sources, such as wind and biomass, in the future.
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