13 June 1995 Mr Ross Cartey Office of the Regulator-General 1st Floor, 35 Spring Street MELBOURNE VIC 3000 Dear Mr Cartey, re: Breamlea 60 kW Windgenerator Further to our previous letter and in response to your letter of 23 May, the Alternative Technology Association (ATA) submits the following: The windgenerator was purchased from Generation Victoria on 29 September 1994. It was grid-connected when bought, and the ATA assumes that Generation Victoria was operating it and its grid-interconnection legally up to and including that date. Whether Generation Victoria or its predecessor(s) had a licence or an exemption for a licence at any stage prior to 29th September 1994 is not known. The ATA purchased the windgenerator with firm plans to leave it at its present site and for it to remain grid-connected. Indeed it cannot function in any way (in any location) without grid connection. Windpower for electricity production has a promising potential along extensive areas of the Victorian coastline. Considering that present Victorian electricity production utilising mostly brown coal is the most polluting electric power in Australia, especially in terms of greenhouse gas emissions, the ATA takes the view that the Office of the Regulator-General should do nothing that discourages windpower production, even on a scale as small as ours, despite the apparent excess capacity of conventional plant at present. Market forces should ultimately determine whether a significant proportion of Victoria's power can be meaningfully sourced from wind turbines. There is certainly a huge potential, especially in Western Victoria, where our preliminary studies indicate that up to 250-500 MW capacity could potentially be installed. This would go a very considerable way towards fulfilling Victoria's share of Australia's commitment to greenhouse gas reduction. It should also be welcomed by the local electricity distribution utility as a highly marketable "green" technology, with significant commercial benefits in terms of supplying peak summer loads, embedded close to end-users, and without the costs of transmission losses from the Latrobe Valley 300 km distant. Indeed our research to date shows a significant positive correlation of availability of windpower with peak system demand. This has profound implications for the immediate deployment and economic operation of strategically situated wind turbines. Sensitive placement and aesthetic considerations should reassure local communities that there is a place for windpower "in their backyard", and indeed may provide a focus for eco-tourism to their region. VPX (Pool) Implications: Under present pool rules it is difficult to imagine that even a large wind farm of say 50 MW could be a pool participant. This is a consequence of the embedded, intermittent nature of windpower precluding guarantee of supply at any particular time. This however does not exclude windpower from making a significant contribution to overall electricity production, as windpower entities are free to negotiate with distribution companies, and ultimately (possibly) end-users for the sale of their product. Windpower producers should be free to negotiate contracts which track half-hourly SMP variations over certain specified price ranges, and this would seem to us not to distort the market in any way, even if windpower was supplying say 10% of total system demand. Electrical installation/ Safety Considerations: It is the understanding of the ATA that all large-scale electricity generation in the state has been essentially self-regulating for decades in terms of electrical design, construction and operation. Obviously in the hands of experts in the field, this has worked well. Similarly, we envisage that any entity embarking on a significant capital venture such as a wind generator would employ competent qualified electrical engineers and electricians to design and install such capital equipment. Regarding the operation of windgenerators, this is largely an automated pro- cedure governed by prevailing winds and a microprocessor program. It would seem reasonable that the microprocessor algorithm should be submitted to the local distribution company for approval by their technical staff prior to commissioning of the machine. The ORG could if necessary, be notified that grid interconnection criteria for a particular windgenerator had been so approved. Maintenance staff would also require adequate training appropriate to their duties, and have clear safety guidelines encompassing all safety recommend- ations of the windgenerator manufacturer, Victorian workplace legislation, and commonsense rules concerning appropriate responses to gales, thunderstorms or major mechanical failure of the wind generator. Licencing: The ATA is keen to foster the emergence of a windpower industry for this state. Market forces and self-regulation, along the sort of lines set out above would seem to provide adequate minimal framework to allow this, without an expensive and detailed regulatory framework to hinder the process. Utilities in two other states are already encouraging and promoting the use of grid-inter- active photovoltaic arrays on domestic rooftops. CitiPower in Brunswick is currently feeding a combination of wind and photo- voltaic power into the local grid of suburban Melbourne. Thus it seems that in the stimulating environment created by present rapid change in the industry, pioneers and forward thinkers are already exploring options appropriate to the development of sustainable and renewable technologies for electricity production. This has to be a healthy phenomenon, entirely consistent with the Government's position of allowing the free play of market forces,and should be allowed to proceed with the minimum of restraint from any quarter. Whether integration of renewables is best achieved by licencing individual operations, class licences or exemption from licence requirements is not presently clear: If licencing is thought to be appropriate, we would strongly argue that any licence fee should be in direct proportion to annual energy output. Thus if Hazlewood fed 9 million MWh each year into the grid, it could pay say 2 cents/MWh or $180,000 annually for a licence. Similarly the Breamlea windgenerator with an expected annual pro- duction of 100 MWh would pay a nominal $2.00 . Basing fees on installed capacity would disadvantage windpower, which is lucky if it can achieve a capacity factor of 35-40% (Breamlea achieves only 20%). If exemption is the preferred option, regulation can be largely devolved to the distribution companies, who would negotiate reasonable conditions which fulfil their technical requirements for grid connection , as part of the normal negotiation process of a commercial contract. This would seem to fit best with the scenario of photovoltaic arrays sprouting from rooftops throughout the suburbs, or at least perhaps north of the Great Dividing Range. Refusal of a distribution company to allow grid connection of renewables of over 10 kW should be subject to arbitration by the ORG, preferably with the involvement of an independent consulting electrical engineer, prior to recourse through the civil courts. Rapid change in the industry, and the uncertain status of some generating entities is causing difficulties for some e.g. the ATA is experiencing some delay in putting on paper a verbal agreement with PowerCor to remain connected to their 22 kV feeder. Similarly, negotiations with our proposed customer (CitiPower) for a contract for the supply of power are yet to be finalised due to uncertainty about licence requirements, etc. The present efforts of the Office of the Regulator-General to clarify the regulatory framework are therefore welcomed. It would be appreciated if your office could confirm at your earliest convenience that our present operation of the Breamlea windgenerator falls within the "protection" of the general exemption currently in force. We hope the above notes help the Office of the Regulator-General in its deliberations. I have taken the liberty of sending copies of this letter to other parties to whom it may be relevant, in case they wish to put submissions to your Office before the end of this month. Yours sincerely, Michael Gunter, Breamlea Ops. Group, ATA Copies to: CitiPower, Brunswick Office PowerCor Karl Mallon, Mechanical Engineering Faculty, Melbourne University Dr Peter Freere, Asia-Pacific Wind Energy Centre, Centre for Electrical Power Engineering, Monash University