Wind Power in South Australia - Impacts

Impacts

The increasing proportion of renewable energy in the state has caused a significant decrease in the emissions intensity of electricity generation in South Australia. This means that, even though electricity demand is increasing, the total emissions from generation has been in decline.

The rapid development of wind power in South Australia has led to direct economic effects from the construction and operation of wind farms. There has been a total of $2.8 billion in wind power investment up to October 2011 which is estimated to have created 3000 direct and indirect jobs. Recent studies into the economic effects of wind farms have reported that a 50 MW installation pays host landholders some $250,000 per year, is constructed by workers who spend up to $1.2 million locally and contributes up to $80,000 annually to community projects.

Policies to streamline the approval process for wind farm developments have met with some community opposition. Specific concerns have been raised by rural residents who claim that wind farms have an unacceptable impact on property values, health and the environment. However, a study by the CSIRO based on data collected on developments in New South Wales, Victoria and South Australia concluded that there is a high degree of community support for wind farm developments from those who do not seek media attention or political engagement to express their views.

With respect to the impact on electricity prices in South Australia, the effects of the rising share of wind power has been less clear. South Australia's wholesale electricity prices, which were once the highest in the country, are now the lowest. This decline in wholesale price has been attributed to the impact of wind power on the merit order effect, where relatively low cost wind power is purchased by retailers before higher cost sources of power. In spite of this, a study undertaken by the Energy Users Association of Australia found that retail electricity prices in South Australia are the third highest in the developed world behind Germany and Denmark, with prices likely rise to become the most expensive in the near future. The former South Australian Opposition Leader, Isobel Redmond, linked the State's high retail prices for electricity to the Government's policy of promoting development of renewable energy, noting that Germany and Denmark had followed similar policies.

In July 2012, the Essential Services Commission for South Australia announced that it had approved further electricity retail price rises of 18%. It noted that the increases in prices were being driven by the introduction of a carbon tax by the Australian Government, the impact of feed-in tariffs for domestic solar panels and 'other network changes'. The Government stated that the price increase due to the carbon tax was approximately half of that experienced by other States due to the high installed capacity of wind and gas-fired generation. The Essential Service Commission of South Australia has determined that wind power adds just 0.366c per kWh to the average South Australian electricity bill.