Stimulus ‘failing’ energy projects

The NSW sugar industry is demanding that the federal government’s revamped renewable energy scheme be further amended. It wants the changes to salvage jobs on a $220 million renewable energy project.

The NSW Sugar Milling Co-operative has set up two co-generation plants at Condong and Broadwater, in the state’s north, that are fuelled by a biomass material left over from crushed sugarcane stalks. But the project is struggling financially because of the low price of renewable energy certificates designed to stimulate green projects, according to the co-operative’s chief executive, Chris Connors.

The certificates were trading yesterday at $36.13 on the spot market, far below the $60-$70 price Mr Connors said was needed for his projects to stay viable.

In February, the government announced its renewable energy target scheme would be split into two to stop household-level renewable technologies crowding out commercial-scale projects such as co-generation plants. But this split does not take effect until January 1.

Until then, RECs created from technologies such as household solar panels can be “banked” to be traded in the commercial-scale scheme next year.

Mr Connors maintains the government’s fix has not worked yet as there is still a surplus of RECs related to household solar panels pushing prices down.

He wants changes such as bringing forward increases to the fixed yearly target for big-scale renewables production. Jobs are at stake, he said.

The manager of the Broadwater sugar mill, Bill Walker, said having viable co-generation projects was important to the organisation.

But Climate Change Minister Greg Combet said the plan to split the scheme would deliver $16 billion in investment in large-scale projects by 2020.

Clean Energy Council chief executive Matthew Warren cautioned against making further changes to the government’s scheme, arguing this could spook investors and saying short-term assistance was needed instead for projects that could prove viable at a later point.

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