The alternative energy sector is set to grow but dogged by policy doubt, writes Peter Hannam.
A fat pipeline of proposed wind farms for NSW is poised to propel the state past Victoria and South Australia by 2020.
On current figures, NSW lags, with less than a third of the installed wind-generating capacity of Victoria and less than a quarter of South Australia's total, according to data compiled by ROAM Consulting.
NSW has nine wind farms in operation but by 2020, when the renewable energy target is due to end, the state could add at least 30 more, if proposed projects get built.
By 2020, NSW will have about 4100 megawatts of installed wind capacity, almost 15 times the current level, ROAM predicts. By contrast, Victoria's total will roughly triple to 2900 megawatts and South Australia's will double and then some to 2700 megawatts.
"People didn't really appreciate the quality of the wind resource" in NSW, said Iain MacGill, a director of the University of NSW's centre for energy and environmental markets.
The performance of existing NSW wind farms "has been extremely good," Professor MacGill said, adding high generating rates had often coincided with peak power demand, delivering good prices to owners.
By contrast, South Australia may be home to about half of Australia's wind resource but limited grid capacity curtails its potential. Even so, Roaring Forties winds mean the state typically sources a quarter of its power needs from wind, with the ratio rising to between 70 per cent and 80 per cent on some days.
Victoria, itself blessed with rich wind resources and an available market, has seen proposed wind projects shrivel after the state government bowed to opposition to wind farms last year and restricted wind turbines to no closer than two kilometres from a residence without the owners' written consent.
While the wind industry in NSW faces challenges of its own, including from new state government guidelines under review, the state stands to attract much of the investment that might have ended up in Victoria.
The state may secure about $7 billion investment in wind farms alone between now and 2020, according to the Clean Energy Council, or not far short of $1 billion a year for the rest of the decade.
While it is difficult to put a figure on the investments involved, the council estimates another $18 billion may pour into the sector by 2020, more than doubling the existing total.
Such projections, though, are subject to major assumptions. Not least of these, is that the federal government will support the renewable energy target in its current settings. On Wednesday, the Climate Change Authority is due to release its final recommendations on whether the target of 20 per cent renewable energy by 2020 needs any tinkering.
The government has to respond in six months - clean energy advocates hope it will halve that time - prolonging the policy uncertainty that has become virtually a permanent feature of the industry's landscape.
"The industry will still be nervous about the future of the renewable energy target until we've got the final decision," the policy director at the Clean Energy Council, Russell Marsh, said.
NSW's emergence as the dominant wind state is also clouded by uncertainty at the state level that looks like dragging into the new year.
Wind industry advocates had been hoping state guidelines would be clarified as soon as this week, with the matter understood to be among a long list of issues to be decided by the cabinet of Premier Barry O'Farrell.
A spokesman for the Planning Minister, Brad Hazzard, though, said the government was "still finalising" the guidelines. It's understood the cabinet may not vote on whether to modify the government's draft guidelines until perhaps February.
Draft NSW guidelines indicate the government may go for a similar two-kilometre "set back" to Victoria but less strictly imposed, Mr Marsh said. Instead, it may require a "pre-approval planning process" involving joint regional planning panels.
While it "might be slightly easier" than Victoria, the changes could add to the uncertainty for developers, Mr Marsh said.
Others, though, worry the procedure may require neighbours to agree to the construction of a wind farm on an adjacent property - potentially a tougher rule that may deepen opposition developers will have to overcome.
They note, too, that farmers may have a coal seam gas well drilled within 200 metres of a "principal place of residence" - a much less stringent requirement for that industry, compared with wind.
"We don't think it's fair that wind should have onerous regulations imposed on it that aren't imposed on other developments that might have a similar or even bigger impact," Mr Marsh said.
On the cusp of a boom, but wind could yet change
The industry will still be nervous about the future of the renewable energy target. Russell Marsh, Clean Energy Council
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