Select Committee — Wind Turbines Submission from the South Australian Government February 2015

Introduction South Australia has established itself as the nation’s leader in wind energy investment having attracted 41% of the nation’s installed capacity. Indeed, South Australia has an international reputation, and if it were a nation state would be second only to Denmark in its amount of wind energy penetration.

The significant installed capacity in renewable energy translates into capital investment which benefits the regional and State economy. Since 2003, there has been $5.5 billion in investment in renewable energy with some $2 billion, or 40%, of this investment occurring in regional areas.

In recognition of the economic development potential of renewable energy, in October 2013, South Australia committed to an investment target of $10 billion in low carbon generation by 2025. This target is complementary to existing State targets, including the commitment to the target for 50% of electricity production to be sourced from renewable energy by 2025. Both targets are aspirational and rely on no material changes to the Federal Government’s policy support for low carbon investment, including the Renewable Energy Target (RET).

Renewable energy is a key element of the State Government’s economic priorities as well as an important measure in addressing climate change. The South Australian Government recognises that clean energy technologies, including wind energy, contribute to reducing greenhouse gas emissions. The investment in wind energy also demonstrates that tackling climate change and achieving economic benefits are not mutually exclusive. The South Australian Climate Change and Greenhouse Emissions Reduction Act 2007 specifically sets targets for increasing the use of renewable electricity generated in South Australia and for commercialising renewable technologies.

Estimates show that annual world-wide investment in renewable energy needs to increase four- fold to $1 trillion in order to meet international climate change targets in the coming years1. Australia is well placed to capitalise on this increased investment with abundant renewable resources; a stable political and economic environment; and the potential to attract investment through the recent free trade agreement with China and proposed one with the European Union.

Our success in attracting wind farm investment is not solely attributable to our world class wind resource. We have moved quickly and decisively to tailor our regulatory frameworks and to provide investment certainty which has resulted in 16 operational wind farms with a capacity of 1473 megawatts. As a State we have the reputation for a fair and expeditious planning system.

The State has been a significant beneficiary from wind generation and in 2012 the Clean Energy Council2 stated South Australia had attracted $3 billion in wind farm capital investment which translates to 842 direct jobs and 2526 total jobs. In addition, the $470 million, 270 megawatt

1 International Energy Agency, 2012, Energy Perspectives 2012, online. Available: http://www.iea.org/etp/etp2012/ (30 Jan 2015). 2 Clean Energy Council, 2012, Power of Wind National Snapshot, Available: http://www.cleanenergycouncil.org.au/cec/misc/powerinwind, 16 July 2012.

2 (MW) Snowtown Stage 2 Wind Farm was commissioned late 2014 with 15 ongoing jobs and employing around 175 people during the construction period.

An SKM study3 into the economic impact of the five Hallett wind farms developed by AGL in the mid-north of the state estimates a 3.3% increase in gross regional product during the construction of the wind farms and a 1.4% increase during operation. A Garrad Hassan report4 commissioned by the Clean Energy Council has shown that in the construction of a 50 MW wind farm it is estimated that $50 million will be provided to South Australian’s Gross State Product and 2.6% to a region’s Gross Regional Product.

Wind farm project development generates employment in regional areas, especially during the construction and maintenance phases of a project. The Garrad Hassan report estimates that for a 50 MW wind farm, 48 full time equivalent (FTE) direct construction positions are created and a further 4.63 FTEs during operation.

In addition to the direct employment generated by the construction and operation of a wind farm, there are flow-on effects to the wider community. Local retail and services benefit from the increased economic activity in the locality of a wind farm and it is estimated that for every direct construction and maintenance job created, two additional indirect jobs are created.

Additional community benefits are created by a number of wind farm developers through community benefit funds. The amount of funding has ranged from approximately $100 to $1,000 per MW of installed wind farm capacity. Funds have been provided by developers for sustainability or community development projects. Some wind farm owners also contribute to local communities through direct sponsorship of projects or events, such as football clubs or community festivals.

There is significant support for wind farm projects in regional South Australia. The Clean Energy Council commissioned QDOS5 to undertake wind energy community research in Victoria, New South Wales and South Australia. The research was undertaken predominantly in regional areas close to wind farms. For South Australia the community around the Waterloo wind farm was polled as being an area where there are numerous reports of wind farm annoyance. It was found that 77% of people in regional areas close to wind farms support wind farm developments.

The State’s existing transmission network has the capacity to enable up to approximately 2,300 MW of wind generation in South Australia before generation exceeds regional demand and interconnector export capacity. As the State currently has an installed capacity of 1,473 MW, the network could accept around another 827 MW. This number could be even higher with

3 Sinclair Knight Mertz, 2010, Economic Impact Assessment of the Hallett Wind Farms, Available: http://www.agl.com.au/Downloads/AGL%20Final%20Economic%20Impact%20Report.pdf, 15 June 2012. 4 Garrad Hassan, 2011, Review of the Australian wind industry, Clean Energy Council, Available www.cleanenergycouncil.org.au/...Review...wind- industry.../Review%20of%20the%20Australian%20wind%20industry%202011.pdf, 15 June 2012. 5 Clean Energy Council, 2012, Wind Energy Community Research in Victoria, New South Wales and South Australia, QDOS. Available: http://www.cleanenergycouncil.org.au/cec/resourcecentre/reports (19 July 2012).

3 traditional generators mothballing units in South Australia, and will increase with the augmentation to the Heywood Interconnector, unlocking additional opportunities for wind. The transfer capacity of the Heywood Interconnector will increase by 40% by mid-20166.

Given the importance of wind farm projects and other low carbon investment in South Australia, the Premier of South Australia hosted a clean Energy Summit on 1 December 2014. The Summit was held following the continuing uncertainty in the renewable sector arising from the Federal Government’s review of the RET scheme, a target that has enjoyed bipartisan support for more than a decade. The Summit resolved to call on the Federal Government to abandon any amendments to the existing RET that would jeopardise employment and investment7.

6 Australian Energy Market Commission, 2014, online. Available: http://www.aemo.com.au/Electricity/Planning/Regulatory-Investment-Tests-for-Transmission/Heywood- Interconnector-RIT-T (15 Jan 2015). 7 Clean Energy Summit, 2014, Communique, online. Available: http://www.premier.sa.gov.au/images/Communique/CleanEnergySummit-FinalCommunique.pdf (30 Jan. 2015).

4 Response to Terms of Reference

a. The effect on household power prices, particularly households which receive no benefit from rooftop solar panels, and the merits of consumer subsidies for operators. Investment in wind energy has primarily been driven by the Federal Government’s Energy Target (RET). All states and territories contribute to this market mechanism, no matter how much renewable energy is installed in each jurisdiction. The contribution is determined by the amount of electricity consumed in each state or territory. So, even though South Australia has 41% of the nation’s installed wind capacity, South Australians are paying an amount for the RETwhich would be the same whether we had 4% of the nation’s wind power or 41%. South Australians therefore experience the benefit of a disproportionate share of wind farm investment without having to contribute a disproportionate amount through their electricity bills.

The high incidence of wind power in South Australia has put downward pressure on electricity prices with the Australian Energy Market Commission (AEMC) stating there is evidence wind generation is having a moderating impact on electricity prices in South Australia, with spot prices typically higher at times of low wind8. The AEMC also illustrates that the increase in residential electricity prices from 2011-12 to 2014-15 was lowest in South Australia out of all states.

Accounting for subsidies, the incidence of wind energy is shown to reduce power prices in the long term as evidenced by the Federal Government’s recent modelling. The Government consulted with ACIL Allen on the effect of removing the RET. The subsequent modelling showed the removal of the RET would initially lead to lower retail electricity prices, but in the longer term, as a result of additional low marginal cost renewable energy generation, retail prices would be on average 3.1% higher for residential, commercial and industrial customers9.

According to the Australian Energy Market Operator10 (AEMO), wind energy without subsidy is the lowest cost new build electricity generation technology for South Australia. AEMO’s analysis states a minimum levelised cost of electricity (LCOE) for a 100 megawatt (MW) wind farm of $99 per megawatt hour (MWh). In comparison the LCOE for gas is between $101 – 240 MWh

8 Australian Energy Market Commission, 2013, Electricity Price Trends Final Report, online. Available: http://www.aemc.gov.au/getattachment/fe3d2519-026d-4f01-bdd4-d65ddfae51c3/2013-Residential- Electricity-Price-Trends-Final-Re.aspx (21 Jan 2015). 9 ACIL Allen, 2014, RET Review Modelling, online. Available: https://retreview.dpmc.gov.au/sites/default/files/files/ACIL_Report.pdf (21 Jan 2015). 10 Australian Energy Market Operator, 2014, South Australian Fuel and Technology Report, online. Available:www.aemo.com.au%2FElectricity%2FPlanning%2FSouth-Australian-Advisory- Functions%2F~%2Fmedia%2FFiles%2FElectricity%2FPlanning%2FReports%2FSA%2520Fuel%2520an d%2520Tech%2F2014%2F2014_South_Australian_Fuel_and_Technology_Report.ashx&ei=L0e_VKG4N KPAmAWrooCYDQ&usg=AFQjCNHSikXUJAm7PQn4RdR42DT2rtVIFQ&bvm=bv.83829542,d.dGY (15 Jan 2015).

5 depending on the technology, and coal $153 – 191 MWh. The RET mechanism has been successful in encouraging renewable energy investment in Australia, and since introduction, the cost of both wind and solar technologies has reduced as technologies mature. b. How effective the Clean Energy Regulator is in performing its legislative responsibilities and whether there is a need to broaden those responsibilities. The South Australian Government does not have oversight of this function. c. The role and capacity of the National Health and Medical Research Council in providing guidance to state and territory authorities Noise from wind turbines can be categorised into audible noise, and low frequency and infrasound. The relationship between health effects and audible noise has been evaluated extensively by the World Health Organisation (WHO). The availability of many studies and well researched exposure-response relationships has assisted the WHO to set health-based guidelines.

The South Australian Environmental Protection Authority (EPA) is the regulator for noise from wind turbines and has developed noise guidelines that are based on the WHO 1999 Guidelines for Community Noise. The South Australian Wind farms environmental noise guidelines11 are based on these guidelines and are supported by SA Health. An infrasound comparative study12 and a low frequency noise study13 were both undertaken by the South Australian Environment Protection Authority. Neither study has found evidence that noise impact from wind farms is excessive.

In relation to exposure from wind farms and human health effects including low frequency and infrasound, SA Health refers to the expert advice of the National Health and Medical Research Centre (NHMRC). In 2011, the NHMRC commissioned an independent systematic review of the human health effects of wind farms. The aim was to widen the scope of the initial 2010 rapid review. The review (NHMRC 2013) and a draft information paper from NHMRC (NHMRC 2014)14 suggests there is currently no reliable and consistent evidence of a direct adverse effect of wind farms to human health. The NHMRC invited public consultation on the systematic review and is currently working on an update to the public statement. Due to limited scientific

11 Environment Protection Authority, 2009, Wind Farms Environmental Noise Guidelines, online. Available: http://www.epa.sa.gov.au/xstd_files/Noise/Guideline/windfarms.pdf (21 Jan. 2015). 12 Environment Protection Authority, 2013, Infrasound Levels Near Windfarms and in other Environments, online. Available: http://www.epa.sa.gov.au/xstd_files/Noise/Report/infrasound.pdf (21 Jan 2015). 13 Environment Protection Authority, 2013, Low frequency Noise Near Windfarms and in other Environments, online. Available: http://www.epa.sa.gov.au/xstd_files/Noise/Report/low_frequency.pdf (21 Jan. 2015). 14 NHMRC, 2015, Systematic Review of the Human Health Effects of Wind Farms, online. Available: https://www.nhmrc.gov.au/guidelines-publications/eh54 (30 Jan 2015).

6 evidence in some areas of the review, the NHMRC is expected to issue a Targeted Call for Research once the Information Paper has been finalised. d. The implementation of planning processes in relation to wind farms, including the level of information available to prospective wind farm hosts. Developers have been attracted to South Australia not only due to the excellent wind resource, but also due to South Australia’s reputation for a fair, transparent and expeditious planning system.

In October 2011, new planning policy was adopted through the Statewide Wind Farms Ministerial Development Plan Amendment. The new planning policy implemented a planning policy and procedure regime that:

 designates all wind farms proposed within ‘compatible’ zones (rural, primary production and such like) a merit kind of development. This means the proposal will be assessed on its merits and the proponent has a right of appeal against a decision of an authority; and  sees all wind farm proposal trigger public consultation with neighbours but reserves widespread public consultation for those proposals that include one or more turbines located less than 2000 metres from: an existing or approved dwelling; tourist accommodation; or potentially incompatible zone such as an airfield, residential or township zone.

While multiple assessment pathways remain as options for wind farm developers, the policy changes encourage assessment through the local Council pathway.

All wind farm development applications in South Australia are referred to agencies for comment to assist with the development assessment. The EPA, for instance, has developed statutory Environmental Noise Guidelines 200915 to assist with the assessment of noise impacts from wind farms and reviews all wind farm applications in the state giving advice to the assessment authority.

Once a wind farm development application is lodged with the assessment authority there are statutory public consultation time periods and the ability for community members to make submission to the assessment authority on the development.

There are benefits associated with wind farm development for local farming communities. Landowners hosting wind turbines receive a substantial, diversified and reliable income during the construction and operational periods of the wind farm (around 27 years). These funds can serve to drought proof income streams from farming practices. Wind turbines have a relatively small land footprint which makes land hosting wind turbines readily available for agricultural activities.

15 South Australian Environmental Protection Authority, 2009, Wind Farms Environmental Noise Guidelines, online. Available: http://www.epa.sa.gov.au/xstd_files/Noise/Guideline/windfarms.pdf (21 Jan 2015).

7 Wind farm developers recognise the need for good community consultation and spend considerable hours with their prospective communities explaining their development and fielding questions. An example of good practice in South Australia is the Trust Power Palmer Wind Farm development. The company sends regular newsletters to stakeholders, has undertaken community meetings and employed a community liaison person who lives in the local area to assist with information dissemination. They have developed the concept of neighbourhood agreements whereby non-host residents who live nearby a wind farm, but who are not hosts, can benefit financially from the development. e. The adequacy of monitoring and compliance governance of wind farms. In South Australia, a wind farm developer needs to abide with specific compliance hurdles in order to be operational, and these requirements have led to a well regulated industry. Compliance is required for a change in land use, connection to the grid, generation, and noise.

Planning approval is required for a change in land use, which includes compliance with the EPA noise guidelines. Before developing the site, the proponent is typically required to monitor background noise. Once commissioned, further monitoring is required to ensure the wind farm operates within the noise guidelines.

This system is proven to be sufficiently robust. During 12 years of wind industry history in South Australia, there was only one case of marginal non-compliance linked to the temporary presence of tones in wind farm noise. This issue was rectified by the wind farm owner in an efficient and timely manner.

If noise issues are raised at a wind farm site, the EPA can investigate at any time. Noise complaints at the Waterloo Wind Farm led to an extensive study16 which conducted noise (including infrasound) and meteorological monitoring in the region surrounding the Waterloo Wind Farm for approximately 10 weeks starting in April 2013. A community noise diary program was run over the same time period.The resultant analysis found the Waterloo Wind Farm met relevant South Australian and international standards and the EPA states there is no evidence linking the noise from the wind farm to adverse impacts on residents.

The developer needs to negotiate a connection agreement with the Transmission Network Service Provider, which in South Australia is ElectraNet. Before generating electricity, a generation licence is required from the Essential Services Commission of South Australia (ESCOSA). ESCOSA has strict guidelines regarding wind farm generation and imposes special licence conditions relating to technical standards for reactive power and fault ride through17.

16 South Australian Environment Protection Authority, 2014, Waterloo Wind Farm Environmental Noise Study, online. Available: http://www.epa.sa.gov.au/environmental_info/noise/wind_farms/waterloo_wind_farm_environmental_nois e_study (21 Jan 2015). 17 Essential Services Commission of South Australia, 2010, Wind Generation Licensing, online. Available: http://www.escosa.sa.gov.au/projects/15/2010-wind-generation-licensing.aspx (21 Jan 2015).

8 f. The application and integrity of national wind farm guidelines. In 2010, the Environment Protection and Heritage Council drafted national wind farm guidelines. The South Australian Government is not supportive of national wind farm guidelines due to the particular nature of each state, and the individual differences in planning system regimes. The latest version of the Draft National Wind Farm Guidelines included controversial recommendations which South Australia did not support and further work on the Guidelines was stalled due to a change of priorities at the Federal level. g. The effect that wind towers have on fauna and aerial operations around turbines, including firefighting and crop management. Before development approval is obtained for a wind farm development, the proponent must survey the surrounding area for potential flora and fauna impact. Surveys are undertaken at key times of the year which are timed to the activity of particular species. If threatened species are discovered at a potential site, a developer is required to design the wind farm to ensure there is no significant impact on the species in accordance with the requirements of the Environment Protection and Biodiversity Conservation Act 1999.

There are incidences of bird strike at wind farms, although some wind farms do not incur bird kills and modern wind turbines operate in low rotation speed modes thereby mitigating bird strike. This information, however, needs to be put in context and compared with other forms of electricity generation. A 2013 study18 estimated the number of birds killed per gigawatt hour (GWh) of generated wind electricity, fossil fuel and nuclear power systems. The study estimates that wind farms and nuclear power stations are responsible each for between 0.3 and 0.4 fatalities per GWh of electricity, while fossil fuelled power stations are responsible for about 5.2 fatalities per GWh.

Amongst artificial structures, wind farms are a low cause of bird deaths. A 2005 study19 compared bird deaths from wind farms to other causes of bird deaths. From this research, it is estimated that less than 1 bird death per 10,000 can be attributed to wind farms compared to 850 for vehicles, 1060 for cats and 5820 for buildings.

The Country Fire Service (CFS) in South Australia states there is no guarantee that every fire in the state will be serviced by aircraft.20 The primary form of fire suppression is firefighters on the ground, and as aircraft cannot fly through heavy smoke, aerial firefighting equipment is only deployed if conditions are right. Where vertical obstructions exist in the airspace around a fire such as power lines, weather masts, radio and television transmission towers, tall trees and

18 Sovacool, B.A. 2013, ‘The avian benefits of wind energy: A 2009 update’, Renewable Energy: An International Journal, Vol. 49, Jan. 2013, pp. 19-24. 19 Erikson, 2005. Available online at: http://www.dialight.com/Assets%5CApplication_Notes%5CSignaling%5CObstruction%20Lighting%20Bird %20Strike%20Study.pdf 20 Country Fire Service, 2013, Understanding Aerial Firefighting, online. Available: http://cfs.sa.gov.au/public/download.jsp?id=44830 (21 Jan 2015).

9 wind turbines, a dynamic risk assessment is undertaken prior to the aircraft being committed to fire-bombing operations.

The road infrastructure underpinning a wind farm development provides greater on-ground access to farmland areas and anecdotal evidence suggests this infrastructure assists with on- ground firefighting.

For crop spraying, a pilot will navigate around obstacles, and in situations where there is a potential conflict between aerial crop spraying operations and wind turbines, development approval cannot be obtained unless this is addressed in the development assessment.

In case of need, the operation of a wind farm can be stopped to enable safe passage of small aircrafts for firefighting or agricultural needs.

If there is any potential impacts on native flora, approval will need to be obtained from the Native Vegetation Council in relation to the Native Vegetation Act 1991. Any subsequent clearance of native vegetation for wind farm developments will generally need to be offset through the establishment of a significant environmental benefit which is over and above the impact of the clearance. This will typically involve the management and protection of vegetation elsewhere in the region. h. The energy and emission input and output equations from whole-of-life operation of wind turbines. South Australia has experienced a changing electricity generation base in recent years with the increasing contribution of wind to electricity supply. In terms of overall output, wind overtook coal based generation to become the second most relied upon generation source in the State’s electricity mix in 2011-12. Data from the National Greenhouse Accounts shows that emission factors for electricity production in the state has reduced as a result of wind energy. In 2010 Scope 2 emissions from purchased electricity produced 0.72 kilograms of carbon dioxide equivalent per kilowatt hour and in 2012 it had reduced to 0.61.21

A life-cycle assessment undertaken for the Waterloo Wind Farm in South Australia22 estimated that the energy consumed during construction of the wind farm would be generated within 4.8 months. The study accounted for raw material extraction, production, transport, operation, demolition and disposal. i. Any related matter. The World’s largest producer of electricity, China, has over 90 gigawatts of wind generating capacity installed. Last year China installed more renewable energy capacity than conventional

21 National Greenhouse Gas Inventory, 2010, 2014 Scope 2 Emissions Indirect from Purchased Electricity, online. Available: http://ageis.climatechange.gov.au (21 Jan 2015). 22 PE Australasia, 2011, Life Cycle Assessment of the Waterloo Wind Farm – Final Report.

10 fuel for the first time23. Worldwide investment in renewable energy is growing and last year $310 billion of investment occurred24.

Recent investigations in the energy sector indicate that electrical grids with significant energy inputs can be sustainable. In 2014, the AEMO and ElectraNet released a report25 concluding that the South Australian power system can operate securely and reliably with a high percentage of wind and solar photovoltaic generation, including in situations where wind generation comprises more than 100% of South Australian demand, as long as one of the following two key factors apply: a) The Heywood Interconnector linking South Australia and Victoria is operational. b) Sufficient synchronous generation is connected and operating on the South Australian power system.

Decades of successful of wind farm operation has produced no evidence that environmental impact from wind farm operation is excessive. This is confirmed by a steady growth of the wind generating capacity across the world. Australia has significant wind potential which can be used as an effective resource for reducing Australia’s greenhouse gas emissions and increasing the nation’s competitiveness on a global scale.

Enquiries to:

Catherine Way Industry Development Manager RenewablesSA

23 Ren21, 2014., Renewables 2014, Global Status Report, online. Available: http://www.ren21.net/Portals/0/documents/Resources/GSR/2014/GSR2014_full%20report_low%20res.pd f (21 Jan 2015). 24 Bloomberg New Energy Finance, 2015, Global Trends in Clean Energy Investment, online. Available: http://about.bnef.com/presentations/clean-energy-investment-q4-2014-fact- pack/content/uploads/sites/4/2015/01/Q4-investment-fact-pack.pdf (21 Jan 2015). 25 AEMO & ElectraNet, 2014, Renewable Energy Integration in South Australia, online. Available: http://www.aemo.com.au/Electricity/Planning/Integrating-Renewable-Energy (30 Jan 2015).

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