Government offers carrots for green energy projects

By BRIAN FALLOW

Renewable energy projects totalling 240 megawatts have been awarded subsidies under the Government's climate change policy.

The Government has offered help for projects that reduce emissions of the greenhouse gases blamed for global warming, payable not in cash but in carbon credits - internationally tradeable rights to emit greenhouse gases.

Projects announced already include 94MW of new windpower, said Climate Change Minister Pete Hodgson.

Contracts already signed but not yet announced would add another 140MW in the form of hydro-electric, geothermal, co-generation and windpower developments.

Assuming those projects went ahead, they would generate about a third of the electricity that Meridian Energy's aborted Project Aqua would have delivered, he said.

"These projects all have a strong incentive to begin generating by January 2008, a year before the first power from Project Aqua was expected, as any delay beyond that date would mean fewer credits for the project owners," Hodgson said.

To be eligible, a project must deliver verifiable savings of at least 10,000 tonnes of carbon dioxide or its equivalent in other greenhouse gases during the first commitment period of the Kyoto Protocol, 2008 to 2012.

To cross the 10,000-tonne threshold would involve savings of about 3000MWh of electricity or 40,000 gigajoules of natural gas, 750,000 litres of diesel or 1000 tonnes of coal.

Applicants have to estimate what the carbon credits will be worth and demonstrate that the project would not go ahead without the subsidy.

If the Kyoto Protocol does not come into force the projects scheme will lapse.

A further tender round is expected to be announced in next month's Budget.