The Danish company hoping to build a giant wind farm in WA says renewable energy projects may be held back if developers need to pay for infrastructure upgrades.
The Danish company hoping to build a giant wind farm off the Western Australian coast says renewable energy projects may be held back if developers need to pay for infrastructure upgrades.
Copenhagen Energy is aiming to build a wind farm capable of producing three gigawatts of electricity, about half the current capacity of the South West energy grid.
Its wind farm, to be developed over a number of years, would have up to 200 turbines, each 260 metres high.
The company’s development manager for Australia, Joy Francis-Hayes, said a big issue facing the project was the question of who would bear the cost of infrastructure upgrades.
“The big showstopper for us at the moment is infrastructure,” Ms Francis-Hayes told the World Energy Cities conference today.
“To bring offshore wind to WA, we need port upgrades.
“We also need the grid to be upgraded so we can get our green electrons to market.
“We will pay for the grid upgrades to get to the sub-station, but what we find challenging is the expectation that renewable developers will pay for the backbone grid upgrades and also potentially upgrades to the port.
“That is a little concerning because it will certainly de-incentivise the renewable market and also the electrification of industry here."
Ms Francis-Hayes said it would cost an estimated $300 million to upgrade the ‘backbone’.
“Can the state underwrite some of those big-ticket items like most other countries in the world do?” she asked rhetorically.
Energy Minister Bill Johnston has previously acknowledged WA’s electricity transmission network needs a huge upgrade to connect the multiple renewable energy projects planned for the state.
The estimate is 4,000 kilometres of new transmission lines.
The federal government recently allocated $3 billion from its Rewiring the Nation program to fund cheap loans for some of these upgrades in WA.
However, the state government has emphasised that industry will also need to pay as the expected increase in energy demand is driven by industry rather than households in the metro area.
Project developer Infinite Green Energy has already recognised this reality.
Chief executive Stephen Gauld said Infinite was planning to extend the electricity grid by about 50km north of Eneabba to connect its planned Arrowsmith project.
“Unfortunately we have to pay for it because the government won’t fund it,” Mr Gauld told the conference.
“The private sector has to fund the extension.”
However, he said that was not its main concern.
Mr Gauld explained that the wind and solar installations from stage one of its Arrowsmith project would produce enough spare electricity for 65,000 houses a day.
“The big problem is that you can’t load it into the grid, it is limited to 20 megawatts," he said.
“The biggest problem on the network is from Eneabba South all the way back to Perth; it's $650 million to upgrade the SWIS to allow electricity to come in at gigawatt scale so we can start the transition.
“A lot of people say we need the grid upgraded to get these projects hooked in, but it's not just hooking them in, it’s the infrastructure back to where the consumers are is the problem.”