If Chinese companies proceed with a reported joint-venture plan to build or buy 1500 megawatts of wind power in Australia they will be multi-billion dollar beneficiaries of Labor’s Renewable Energy Target.

The planned 1500 megawatts of wind power two Chinese companies intend to build or buy in partnership with the lightly capitalised Australian company CBD Energy would produce approximately 4 million megawatt hours of power a year, assuming a middle of the road capacity factor of 0.3.

At a nominal, and conservative, value of $50 per Renewable Energy Certificate for every megawatt hour of power produced the income – on top of the price received for sale of the power itself – would be around $200 million a year.

Given the requirement for big generators and users of power to buy RECs until 2030, the income from the certificates alone would therefore be in the order of $2 billion over the last decade of the scheme – totally discounting the revenue stream over the next eight years as the company develops its portfolio of wind assets.

If the REC price from 2020 to 2030 was closer to what the Government has suggested the starting price for the certificates would be - $70 – then annual income would be closer to $280 million and over the last decade of the RET, the certificate income alone would be close to $3 billion.

“It’s a free country and good luck to the Chinese companies for seeing Labor coming and getting involved in this deal,” Senator Boswell said.

“But I think Australians might find it somewhat ironical that, courtesy of Labor’s ridiculous RET, China will be laughing all the way to the bank – as our electricity prices rise in part to subsidise their profits.

“If the detail provided so far is accurate and the expertise of the Chinese means they can produce their wind power for around $90 per megawatt hour, which is about $30 less than the current industry average, then Labor’s RET will prove to be very sweet low hanging fruit indeed.”

ENDS