The wind farm industry has called for the Gillard government to implement a significantly higher carbon tax than has been hinted at so far, with one player saying it needs to be at least $50 a tonne of carbon dioxide to boost renewable energy investment.
Interest in wind farm projects has stalled amid the uncertainty over the carbon price and the flood of renewable energy certificates already on the market, reducing the incentive to build.
Industry figures say the carbon price needs to be substantial to force power generators to use cleaner energy sources.
Pacific Hydro’s Australian general manager, Lane Crockett, said a price of $30 a tonne was “a bit low”, with at least $50 a tonne necessary to spur investment in renewables.
“Whether that’s embedded in an REC or in a carbon price that’s in the wholesale energy price, it doesn’t really matter,” he said.
Under the government’s renewable energy target, wind farms receive one REC for each megawatt hour generated, which they can then sell on to energy retailers.
The present price for RECs is about $35 each, with wind generators needing at least $100 per MW/h to be commercially viable.
Climate Change Minister Greg Combet has said the carbon price would be “south of $40 a tonne”; the government’s climate change policy adviser, Ross Garnaut, has recommended $20 to $30 a tonne.
