Environmental Assessment: Proposed Wind Farm, Cullerin NSW 4 PROJECT JUSTIFICATION 4.1 Project benefits Taurus Energy is committed to developing the Cullerin Range Wind Farm in a way which minimises the local impacts and maximises the benefits of the project. The project has been specifically designed as a small wind farm with only 15 turbines. The project offers: • Up to 15 wind turbines, each with three blades up to 46m long mounted on a tubular steel tower up to 80m high; • Production of up to 95,000 GWh of renewable electricity per annum, sufficient for the average consumption of up to 12,200 homes; • Reduction in greenhouse gas emissions of up to 95,000 tonnes of carbon dioxide (equivalent) per annum, equivalent to taking up to 19,000 cars off our roads for 30 years; • Savings in water consumption of 110 to 125 Million litres per annum of potable water used in coal fired power stations; • Annual savings in pollution from coal fired power stations of up to 538,000 kilograms of sulfur dioxide, up to 233,000 kilograms of nitrogen oxides, and up to 2090 kilograms of particulates; • Provision of a community fund of $25,000 per annum for local community and environmental projects; • Provision of local jobs and injection of up to $10 Million into the local economy; • Improved security of electricity supply through diversification. 4.2 The viability of wind power 4.2.1 International wind power development Wind farms are an increasingly important source of electricity generation worldwide. Internationally, by the end of 2005, the total capacity of wind energy was more than 58,000 Megawatts which amounts to over three times the total capacity of power generation in New South Wales. Approximately 72% of this has been installed in the last 5 years (AWEA 2005). Wind power technology has evolved rapidly through a research and development stage in the 1980’s, rapid expansion and consolidation in the industry in the 1990’s and is now a mature, advanced energy technology. As the technology has developed, the cost of wind power has been reduced. In some regions, wind farms are already competitive with alternate energy sources such as fossil fuels. Current Worldwide and European wind capacity (MW) is shown in Table 4.1. Final 47 nghenvironmental Environmental Assessment: Proposed Wind Farm, Cullerin NSW Table 4.1 Worldwide wind power capacity at end 2005 (WWEA 2006) Region Installed Installed Installed Installed Capacity Capacity Capacity Capacity 2005 (MW) 2005 in % 2004 (MW) 2004 in % Europe 40.932 69,4 34.758 72,9 Africa 252 0,4 240 0,5 Americas 10.036 17,0 7.367 15,5 Asia 7.022 11,9 4.759 10,0 Australia/Pacific 740 1,3 547 1,1 World 58.982 100,0 47.671 100,0 Top 20 Countries by Installed Capacity: Country/region Additional Capacity Percentage Growth Total Capacity Installed in 2005 in 2005 (%) Installed at end (MW) 2005 (MW) 1. Germany 1,798.8 10.8 18,427.5 2. Spain 1,764.0 21.3 10,027.0 3. USA 2,424.0 36.0 9,149.0 4. India 1,430.0 47.7 4,430.0 5. Denmark 4.0 0.1 3,128.0 6. Italy 452.4 35.8 1,717.4 7. United Kingdom 465.0 52.4 1,353.0 8. China 496.0 64.9 1,260.0 9. The Netherlands 141.0 13.1 1,219.0 10. Japan 143.8 16.0 1,040.0 11. Portugal 500.0 95.8 1,022.0 12. Austria 213.0 35.1 819.0 13. France 371.2 96.2 757.2 14. Canada 239.0 53.8 683.0 15. Greece 100.3 21.2 573.3 16. Australia 193.0 50.9 572.0 17. Sweden 57.9 12.8 509.9 18. Ireland 157.1 46.4 496.0 19. Norway 0.0 0.0 270.0 20. New Zealand 0.1 0.1 168.2 Source: World Wind Energy Association press release 7 March 2006 Final 48 nghenvironmental Environmental Assessment: Proposed Wind Farm, Cullerin NSW According to a media statement released 1 February 2006 by the European Wind Energy Association (EWEA), the EU cumulative wind power capacity increased by 18% to 40,504 MW by the end of 2005, up from 34,372 MW at the end of 2004. In total, 6,183 MW of wind power capacity were installed in 2005, representing a wind turbine manufacturing turnover of some €6 billion. In this same media statement Prof. Arthouros Zervos, President of EWEA stated: “With the installation of a record 6,183MW in 2005, wind energy has achieved the European Commission’s 40,000MW target for 2010, five years ahead of time. This underlines the technology’s ability to deliver fast and vast amounts of clean energy.” This strong growth in recent years has led the European Union to review its projections for wind power capacity. Figure 4.1 shows that the EU projections to 2010 have recently been increased, from the original 40,000MW to a new expectation of over 72,000MW in Europe. Figure 4.1 European Union wind power capacity projections (EC 2006) Other markets are growing strongly in addition to this rapid growth in the European Union. China has the potential to be world’s biggest wind energy market by 2020, doubling its current wind energy target for 2020 to 20,000MW (Hydro Tasmania 2006). In the USA, 2,500MW new capacity was installed in 2005 with over 3,000MW expected in 2006 and similar growth in 2007 (AWEA 2006b). In many countries, even with already strong growth, governments are implementing policies to further accelerate the adoption of wind and other renewables for electricity generation. In a media statement in December 2005, the United Kingdom’s Energy Minister, Malcolm Wicks stated: Final 49 nghenvironmental Environmental Assessment: Proposed Wind Farm, Cullerin NSW "As an island nation, we would be foolish not to exploit to the full all the natural resources that affords. Research from Oxford University recently confirmed that Britain has the best wind resource in Europe, providing most energy during peak daytime and winter periods. I am wedded to increasing the amount of energy we source from this and other forms of renewables. This year, there's been record growth in the industry and our drive to reach our 10 per cent target by 2010 is undiminished." The European Wind Energy Association (EWEA) summarises many of the drivers for increased government support for wind as part of a balanced energy policy: “Wind energy is a significant resource; it is safe, clean, and abundant. Unlike conventional fuels, wind energy is an indigenous supply permanently available in virtually every nation in the world, delivering energy security benefits of eliminating fuel costs and long term fuel price risk, and avoiding the economic, political and supply risks of dependence on imports from other countries. Wind power has no resource constraints; the fuel is free and endless.” (EWEA 2005) 4.2.2 Wind power in Australia In Australia, the cost of wind energy is more than the cost of coal-fired electricity at the wholesale level. Wind farms are viable because of the Federal Government's Mandatory Renewable Energy Target (MRET). MRET requires electricity retail companies (such as Country Energy) to purchase a percentage of their power from renewable energy sources. The proposed Cullerin Range wind farm will provide renewable energy which is eligible for Renewable Energy Certificates under the Federal Government's scheme. The full costs of MRET have already been taken into account by electricity retail companies in power prices set by them. Therefore, the wind farm will not increase prices for NSW residents or businesses. In fact, it will reduce the costs of production by reducing transmission losses to the region. Many people in Australia do not acknowledge the government support that coal-fired generators have received over many years, and believe that schemes such as MRET are unwarranted. MRET was established in legislation to assist the development of this new industry in Australia, and to reduce greenhouse gas emissions from power generation. By doing so, MRET (and wind farms) will provide a base for cheaper and cleaner power into the future. 4.2.3 Viability of this project The Cullerin Range wind farm would be developed by a private company. Accordingly, it is necessary for the project to provide an adequate financial return. The commercial viability is driven primarily by capital costs and the related cost of financing such projects. While the energy in the wind is free, the energy produced must make sufficient return to cover the high up-front costs of building the wind farm. In the case of this project, the commercial viability is supported by relatively low cost transmission line connections (from using the existing line onsite) together with good wind speeds which have been measured on the site. A number of elements included in this proposal, such as the installation of power lines underground, result in increased project costs to the proponents, and these higher costs have been accepted where they result in a project which is still commercially feasible. Final 50 nghenvironmental Environmental Assessment: Proposed Wind Farm, Cullerin NSW 4.3 Public attitudes towards wind farms The proposal would promote renewable energy and thereby limit greenhouse gas emissions associated with energy production and is in line with Federal and State government promotion of renewable energy, including: • The Commonwealth Government support for renewable energy provision through the National Greenhouse Strategy (NGS) and the Mandatory Renewable Energy Target (MRET); • The NSW government supports renewable energies through programs of the Sustainable Energy Development Authority (SEDA) which has been incorporated into the Department of Energy, Utilities and Sustainability (DEUS), the NSW Greenhouse Gas Abatement Scheme and the NSW Greenhouse Office.