Wind farms shake up electricity market

A revolution is taking place in Australia's electricity market - and wind is driving it.

Coal provides the bulk of the nation's electricity, but research released Wednesday points to a massive surge in power from wind and natural gas.

The government's economic research agency - ABARE - has for the first time mapped out all energy projects which are in the pipeline.

The research shows 42 wind farms are being developed - almost half of all energy projects in development.

Wind is second only to natural gas in new projects. Between them, they account for well over half of the new generation capacity coming down the line.

New coal projects are well behind.

Over a third of new electricity generation will come from renewables, but it's wind all the way - contributions from solar, wave power and "hot rocks" are much smaller.

ABARE found that of new energy projects which are almost ready, natural gas and coal seam methane are dominating.

Meanwhile, more concerns about the cost of emissions trading were raised at a Senate committee hearing on Wednesday.

Emissions trading will push up electricity prices from 2010, and it was the LNG and cement industry's turn to warn of the impact.

The Australian Petroleum Production and Exploration Association warned the scheme would sink about a third of new LNG projects.

There are 16 projects in the pipeline and up to 37 per cent would not go ahead under the scheme, the association said.

Chief executive Belinda Robinson said competitor nations like Nigeria, Indonesia and Malaysia could already produce LNG more cheaply than Australia, so imposing a carbon price would hurt the industry.

Cement Industry Federation Robyn Bain said she was not confident about the scheme.

"My confidence is probably reflected in the dark rings under my eyes from the sleepless nights I have worrying about the (emissions trading scheme)," Ms Bain said.

Making cement uses plenty of electricity. The government has proposed giving the industry 90 per cent of permits for free at first, with that amount to decline over time.

Ms Bain said the free permits should be more permanent, and more free permits should be given out in general.