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Australia Clean Energy Project Growth Slows on Fund Constraints

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Dec. 21 (Bloomberg) -- Australia’s electricity output from new wind, hydro and solar power plants dropped almost 80 percent this year as projects struggled to arrange financing, said a group representing the industry.

Seventeen “large-scale” renewable energy power plants, led by wind farms, started operation in 2010 to add 210 megawatts of capacity to the nation’s electricity grid, the Clean Energy Council said in a report released today. That compares with the 993 megawatts that came on line in 2009.

The Australian government, which aims to get 20 percent of the country’s electricity from renewable sources by 2020, is adjusting incentives from next month to encourage larger renewable projects and spur a revival in investment.

The new arrangement “should go a significant way towards returning some stability and supporting renewable energy investment in Australia,” according to the Council, which represents 450 wind, hydro, solar, wave and geothermal companies.

A surge in household installations of solar systems, encouraged by subsidies, caused a glut in Australian Renewable Energy Certificates, driving down their price and discouraging investment in large-scale ventures, the report said. Clean-power generators sell the RECs to electricity retailers to make the projects more profitable.

Solar Surge

The country has 11 large renewable energy projects under construction that are expected to add 1,045 megawatts of capacity, the Council said. AGL Energy Ltd., the Australian electricity retailer, committed in August to a A$1 billion ($990 million) wind farm in Victoria due to start in 2013.

Australian households installed more than 100,000 solar power systems in 2010, compared with 81,232 between 2000 and 2009, driven by government subsidies, the study found.

“Governments of all levels have vastly underestimated the Australian public’s appetite for solar power over the past 18 months -- and for the uptake of systems under a range of different incentives,” the Council said.

Renewable energy accounts for about 8.7 percent of electricity generated in Australia, it said in the report. Growth in the industry will create more than 55,000 jobs by 2020, in addition to the 8,000 current positions, the Council forecasts.

To contact the reporter on this story: James Paton in Sydney jpaton4@bloomberg.net.

To contact the editor responsible for this story: Amit Prakash at aprakash1@bloomberg.net.

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