Wind jobs falling into a federal black hole

After so much noise from the angry, anti-science, anti-wind farm campaigners that state Liberal governments are championing, you might blame layoffs at Victoria's biggest turbine construction company on the Baillieu government's 2011 anti-windfarm laws and their antipathy to strong climate action.

That company, Keppel Prince Engineering, is seeking volunteers for redundancies. General manager Steve Garner told the ABC, "All we're doing is pre-empting what we see as another black hole in our production coming after May of this year."

Baillieu's wind farm planning laws, and now the axeing of the more ambitious state greenhouse targets, do pose a grave threat to the future of renewable energy. The 2011 wind farm laws are costing our state more than $500 million in lost investment and close to 500 future jobs.

But jobs at Keppel Prince are being lost now. Why? In this case, it's due to Federal policy failings.

There is no lack of approved wind farm projects ready to build. Five wind farms have recently commenced construction works in Western Victoria – to avoid their planning permits expiring, and having to then re-apply under the 2011 state planning laws.

But while they are breaking the soil on the job, they are not necessarily placing the orders for the turbines yet. This would give Keppel Prince ongoing work, but serious financial backing is needed.

A key reason developers can't now get finance to begin construction is the low price of Renewable Energy Certificates (RECs). Wind farms sell these to energy retailers under the Federal government's Renewable Energy Target.

The REC price has been depressed since a Rudd government policy created a flood of "phantom RECs" into the market, allocating 5 RECs for every unit of rooftop solar installed. The price of RECs fell and has not recovered.

Subsequently, the Gillard government addressed the problem by creating a separate RET for large scale renewables. But energy retailers have stockpiled cheap RECs – enough to last to 2015 in some cases.

That means they will start looking for new wind farms in the next year or so. The big Silverton wind project near Broken Hill has been in the news for this reason. But that doesn't necessarily help the workers at Keppel Prince before May.

It doesn't have to be this way. There is a difference between the Liberals' anti-wind policy, apparently mired in extreme free-market and climate denial ideology, and that of the Federal ALP.

The Gillard government has publicly committed to action on climate change. If they want to get it right, they could easily remedy the problem.

A blunt but simple fix for the phantom RECs damage would be to bring the 20% Renewable Energy Target forward from 2020 (or to raise it), enough to force energy retailers to seek out more RECs right away.

Those who are serious about addressing Australia's enormous carbon emissions are starting to call for the most successful system, internationally: a Feed-in Tariff (FIT).

A FIT could lead a much faster rollout of renewable energy, as development would not be constrained by a rationed REC supply. It would not suffer the lowest-common denominator approach that is being used to justify abandoning Victoria's stronger greenhouse targets.

Whatever the mechanism, Federal government needs to act fast to protect the jobs at Keppel Prince because, as the industry will inevitably pick up again soon anyway, it will need these skilled and experienced workers. It is unfair to let such a valuable workforce go, when we know they are needed.

We need to see more of Victoria's planned 1,225 turbines (up to 2970.7MW of capacity) commence construction. That might sound like a lot – but in less than ten years, South Australia has gone from almost zero wind energy to 26% wind power.

Contrast this to 3% wind in the National Electricity Market, overall. This shows just how unambitious the 20%-by-2020 Renewable Energy Target is. All Australia could emulate SA's rapid wind rollout if we wanted to.

The climate clock is ticking. Another disruption, another delay might be the one that spells failure for Australia's weak, belated attempts to reduce our greenhouse gas emissions in time.

The Federal government has to step up now.