Green power companies seeing red [11jan06]: "Green power is in the spotlight this week as representatives from nations ranging from the US to India meet in Sydney for the first Asia-Pacific Partnership for Clean Development and Climate.
The Australian Government has tried to support industry with the development of renewable energy certificates (RECS). But offers for RECs fell from almost $36 per megawatt hour in May to spot prices recently of about $28.
RECs, created under the Renewable Energy Act 2000, must be bought by companies which themselves purchase wholesale power.
Green power companies can sell these RECs � essentially becoming extra profit or supporting the operation against cheaper alternatives like coal.
But lower-priced RECs mean lower margins, with the slump blamed on factors including an uptake in solar hot water systems to supply-demand functions of the market.
Australian Business Council for Sustainable Energy executive director Ric Brazzale said, as a rough guide, REC prices needed to be $35 and upwards to sustain the industry.
Some projects could stumble if prices were below this.
'(But) there will be some projects that will get up,' he said, arguing local factors would affect development.
Mr Brazzale said some existing projects were shielded from price drops because they would have entered into long-term contracts � possibly between five and 15 years.
But he questioned how attractive planned projects using geothermal power could be with prices at current levels.
Another factor is a recent BCSE study which concluded only 150 megawatts of grid-connected projects would be needed to hit a 2010 mandatory renewable energy target.
'There's just no need to develop any new projects,' Mr Brazzale said.
Pacific Hydr"