26 October 2012 Renewable Energy Action Plan Resources and Energy NSW Trade & Investment GPO Box

3889 Sydney NSW 2001 Dear NSW Renewable Energy Taskforce Members

SUBMISSION ~ NSW RENEWABLE ENERGY ACTION PLAN

Please find enclosed a submission from New England Wind regarding the draft NSW Renewable Energy Action Plan. We welcome the opportunity to be able to review and comment on the draft Plan, and commend the NSW Government on their efforts to progress the pursuit of affordable and sustainable energy for residents and businesses throughout the State. This submission is focussed on aspects of the Plan which are most relevant to our work establishing NSW's first community-owned wind farm, in the New England High Country. While there are several aspects of the Plan which are positive with respect to community-owned renewable energy and energy sustainability more generally, the Plan overall lacks sufficient clarity as to how the 20% renewable energy target will be achieved. Nor does it clearly position this Plan's focus on stationery energy within the much larger context of NSW's entire energy footprint. Two recent research reports reinforce the risk posed for residents and industry should NSW lag behind in the uptake of renewable energy and sustainable energy systems. The 2012 Australian Energy Technology Assessment1 predicts that by 2030 renewable technologies such as solar photovoltaic and on-shore wind are expected to have the lowest LCOE of all of the evaluated technologies. Given that energy systems are long-term capital infrastructure with operational lives of 40-60 years and more, the investment paradigm for energy has already swung towards
1 Australian Energy Technology Assessment, Bureau of Resources and Energy Economics, Australian Government Resources, Energy and Tourism, July 2012
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renewables and away from fossil fuels. The affordability of NSW's energy supply rests on recognition and response to this new reality. Second, the health benefits of climate action such as renewable energy are significant. The recent briefing paper Our Uncashed Dividend2 puts the health costs of coal-fired power in Australia from lung, heart, and nervous system diseases at $2.6Bn per annum. As the largest coal-fired power user state in Australia, NSW residents bear the largest share of this health burden. Community-owned and community-scale renewable energy presents a strategically significant opportunity in progressing energy affordability, sustainability, justice and sustainability by: leveraging local investment with government and philanthropic support for community-commercial partnerships which utilise state-of-the-art renewable energy technologies. A 2004 study by the U.S. General Accounting Office found that local ownership of wind farms generates an average of 2.3 times more jobs and 3.1 times more local dollars compared to absentee ownership3 augmenting existing grid infrastructure at the points of generation and usage to significantly reduce the infrastructure costs, particularly of high voltage transmission and distribution more generally enabling local leadership, education and responsibility to solve energy needs rather than merely taking roles as advocates and complainants We thank you for your consideration of our submission which follows. Please feel free to contact the undersigned should you wish to discuss this submission further or require any additional information. Sincerely yours

Adam F Blakester Project Director | New England Wind & Executive Director | Starfish Enterprises Network adam@starfishenterprises.net | 02 6775 2501 | 0419 808 900 Attachment New England Submission regarding Draft NSW Wind Farm Planning Guidelines

2 Our Uncashed Dividend, The Climate and Health Alliance and The Climate Institute, August 2012 3 Renewable Energy: Wind Powers Contribution to Electric Power Generation and Impact on Farm and Rural Communities, U.S. Government Accountability Office, September 2004
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DETAILED SUBMISSION
POSITIVES
New England Wind applaud the NSW Government's specific consideration and support for community-renewable energy (CRE). There is a large and growing global evidence base which demonstrates the significant benefits, leveraged return on investment and important part played by CRE within the broader energy sector. We also welcome the broader focus and inclusion of energy efficiency, recognising its critical part in achieving affordable and sustainable energy overall, as well as its role in ensuring that renewable energy is only used to satisfy efficient energy demand. The creation of new resource mapping data to identify viable locations for renewable energy development, and Crown land that can be used for potential renewable energy production, is likely to be very valuable. There is an obvious opportunity, albeit complicated to realise, of identifying locations which are 'sweet spots' in that they have renewable energy resources, accessible grid capacity, suitable land and supportive landholders and neighbours. And lastly, New England Wind wishes to strongly support the continuation of the Renewable Energy Precinct Program (REPP), and the proposed review with a view to expanding the Program. The REPP has provided critically important assistance to New England Wind and other CRE projects throughout NSW. They have also played an important role in facilitating communication between the community, local stakeholders and renewable energy developers.

AREAS NEEDING FURTHER WORK

New England Wind's main concern with the current draft of the REAP is the significant reliance on a NSW Government role of facilitating, encouraging, exploring and linking. It is often unclear exactly what action is being proposed, who will do the work, what resources are to be allocated, when outcomes are expected, and who is ultimately responsible for implementation. While the REAP notes that current forecasts show that wind energy will deliver the bulk of new renewable generation up to 2020, the development of wind farms in NSW are being hindered by the uncertainty created with the proposed draft NSW Wind Farm Planning Guidelines remaining incomplete. There is a very significant reliance upon the new Renewable Energy Advocate throughout the entirety of the Plan. However it is not clear whether this is a new office or unit, or merely a new staff person, and whether it is adequately resourced to fulfil the breadth and scale of responsibilities identified. The Plan is also unclear what agreements have been established with the relevant authorities and key stakeholders (eg. Essential Energy, AEMO, TransGrid) to enable the identified functions for the Advocate.
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These weaknesses seriously undermine the Plan with respect to realistically mapping a path to achieve the 20% renewable energy target for NSW. NSW is especially vulnerable given its very low current level of renewable energy, and the fact its current generation is predominantly from the Snowy Hydro Scheme given the increasingly variability of rainfall patterns with climate change, and increasing needs for environmental flows as highlighted in the Murray Darling Basin planning process. The proposed support to facilitate community ownership of renewable energy projects by providing funding for local feasibility studies for up to five community renewable energy projects is welcome. However, the Plan falls short of being able to meaningfully progress projects. Most CRE projects in NSW, other than New England Wind, require pre-feasibility rather than feasibility studies to move ahead. Having moved beyond this point, projects like New England Wind need more significant funds to progress to the critical point of being able issue a share offering. Sustainability Victoria provided staged funding of $1.1m for Hepburn Wind, while the Australian Government are providing a 50% capital grant for Denmark Wind Farm. New England Wind will need to undertake the commercial equivalent of $4-6m of work before being able to issue a share prospectus. The Plan also misses the critically important area of demand management, and fails to adequately address the need for fairer terms for small scale renewable energy generators (including solar hot water). These two strategies, together with energy efficiency, play a significant part in reducing both electricity usage (and bills) as well as reducing the need for energy generation. New England Wind recognises that the scale of its impact will be significantly influenced by the extent to which we can enable homes and businesses to reduce demand, increase efficiency and install embedded generation. In this way, our community-owned wind farm can best contribute to the widely shared vision for energy self-sustainability in the New England High Country. Such big goals are best achieved with each party and part of the energy system 'rowing in the same direction'. Recognising this, New England Wind works with a three-stage model for sustainable energy, and recognises that the most sustainable energy system is one where the renewable energy supplies the most essential and value-adding energy needs only (and not wasted or wasteful energy use). In contrast to the new energy resource mapping, we feel that the proposed information portal
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summarising all government programs is unlikely to create new information or address the substantive barriers to greater uptake of renewable energy. Lastly, the REAP is not sufficiently clear in how it describes the various renewable energy initiatives to distinguish between those that are situated in NSW as compared with those which are NSW Government endeavours. This leads to numerous instances where the Plan implies attribution of an initiative to the NSW Government when in fact there has been limited or no involvement. For example, Sydneys role as a major financial centre for facilitating investment in renewable energy projects is an Australian Government rather than NSW Government initiative.

RECOMMENDATIONS
The following recommendations are made to strengthen the REAP and address the weaknesses detailed above: 1. Ensure the REAP delivers affordable and sustainable for NSW residents and industry by 1.1. Include an assessment of how the Plan will contribute to achieving the 20% Renewable Energy Target, including the policy, regulatory and budgetary drivers which will do this 1.2. Clearly explain that the focus of the REAP is on the 20% Renewable Energy Target by 2020 which addresses stationery electricity only, and does not address the far greater energy demands for transport, liquid and solid fuel 1.3. Commit to review the current 20% renewable energy target in view of the ABARE modelling which highlights the likelihood of renewable energy providing a lower cost of energy than coal or gas by 2030 1.4. Ensuring the identified priorities are supported with sufficient resources and delegated responsibility, including a) sufficient capacity for the new Renewable Energy Advocate b) sufficient capacity for the current and potentially expanded Renewable Energy Precincts Program c) negotiating agreement with the various relevant non-NSW Government authorities and stakeholders identified as key d) establishment of a stakeholder mechanism to provide ongoing dialogue and facilitate collaboration, including the participation of industry, consumer, community, welfare and environmental groups 1.5. Review and incorporate the key role of the Industry Capability Network to ensure NSW businesses are informed to consider providing services to all renewable energy projects (in NSW, Australia and New Zealand) 1.6. Incorporate demand management
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2. Increase support for community-owned and community-scale renewable energy by 2.1. Funding pre-feasibility studies for new initiatives (it is suggested that grants of $50,000 per initiative would be adequate) 2.2. Provide adequate funding for projects which have progressed into feasibility study work to significantly progress their developments (it is suggested that grants of $250,000 and upwards would be required per initiative) 2.3. Investigate the merits of local and regional renewable energy generation with respect to optimising use of existing local distribution networks (and so reducing demand on the high voltage transmission network, and in turn the need for expensive capital infrastructure upgrades) 2.4. Finalise the draft guidelines for wind farms (refer enclosed copy of New England Wind submission) 2.5. Strengthening support for small-scale generation including a) a fair price for exported energy b) implementing the COAG agreement for the mandatory phase out of electric hot water systems c) review and upgrade BASIX which still enables construction of large energy using new dwellings with only the most basic considerations of embedded energy and passive and active energy efficiency

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ABOUT NEW ENGLAND WIND

New England Wind is working to establish the first community-owned wind farm in NSW, with 8-12 turbines producing the equivalent of electricity for 10-15,000 homes (being the equivalent of usage by around half the homes of the New England High Country). The final size and capacity of the wind farm will depend upon a range of variables such as wind resource, electricity grid capacity, turbine technology and requirements to ensure overall financial viability. The project has completed pre-feasibility and is now working through the feasibility of a specific site, 20km north-east of Armidale. New England Wind is currently operating under the auspice of Starfish Enterprises, with an independent organisation, New England Wind Cooperative, in the process of being established to carry this work longer-term.

ABOUT STARFISH ENTERPRISES

Starfish's purpose is to enable social change for rural and regional sustainability. Starfish is structured as a non-profit company that uses as community enterprise business model. Starfish supports a network of community entrepreneurs who work individually and collectively on a diverse range of sustainability initiatives. Community renewable energy is a priority for Starfish. Starfish is responsible for the largest community solar initiative in Australia, Farming the Sun, which won a NSW Government Green Globe Award in 2011. The principle at the core of Starfish's DNA, and the meaning behind our name and logo, is to enable, support and spin-off self-sustaining initiatives ~ mimicking the starfish's natural ability to grow an entire new starfish from a lost limb as well as regrow its lost limb! Auspicing New England Wind is an example of this principle in action, providing services and support which enable it to become independently viable and self-sustaining. Community-owned renewable energy is highly sustainable. It delivers significant environmental, economic and social outcomes. It enables community leadership and responsibility and enables a profoundly more benign and affordable energy system.
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