CLP associate halts wind-power projects
CLP Holdings' Australian-based associate has halted several wind projects under development, dealing a blow to the power utility's foray into renewable energy.
Blaming the federal government for not offering favourable policies, Roaring 40s, in which CLP bought a 50 per cent stake seven months ago, has withdrawn its application for a development permit for the A$300 million ($1.8 billion) Heemskirk wind farm in western Tasmania.
The firm has simultaneously wound back the advanced development of the A$250 million Waterloo wind farm in South Australia.
It also raised doubts about the development of the 129-megawatt Musselroe wind farm in northeast Tasmania.
Disappointed, CLP said the government decision not to increase its target in green energy use soured electricity retailers' appetite and commitment in long-term renewable energy deals that would make their projects economically viable.
'While the outlook is challenging in Australia, we are doing all we can to enable those projects in the advanced development stage with excellent wind resources and necessary approval to proceed,' a CLP spokeswoman said yesterday.
She added that Roaring 40s would continue to pursue renewable energy projects in China, India and New Zealand.
In September last year, CLP paid A$110 million to state-owned wind power firm Hydro Tasmania for its 50 per cent stake in Roaring 40s as a short cut in green energy investment in Australia and Asia.
Roaring 40s managing director Mark Kelleher said that without an increase in the initial target level, electricity retailers were reluctant to commit to long-term renewable energy certificate deals, which were crucial in financing renewable energy projects.
'Further substantial investment in the renewable energy industry is unlikely without an increase in the target,' Mr Kelleher said.
In spite of the aborted projects, Roaring 40s will continue construction of wind farms at Woolnorth Bluff Point, Cathedral Rocks and Woolnorth Studland Bay.
UBS analyst Alice Hui Suk-fong said government support was a key factor in making wind projects commercially feasible.
'Without tax benefits or more favourable tariffs as sweeteners, it is difficult to make wind projects economically viable,' Ms Hui said.