Renewable Energy Certificates are accredited by the NSW Sustainable Energy Development Authority. They are earned by energy companies that do not use fossil fuels to produce electricity.

The 10-year deal involves the sale of all renewable energy certificates and green power rights created by the production of electricity from stages one and two of Hydro Tasmania’s Woolnorth Wind Farm. Hydro Tasmania will also sell its Green Power Rights, earned using a similar NSW-based renewable energy incentive scheme, to Energy Australia.

The corporation’s chief executive officer Geoff Willis said the deal gave Hydro the cashflow to invest in further renewable energy projects, including planned wind farms at Heemskirk and Musselroe. In turn these projects should generate more lucrative certificate sales.

Hydro Tasmania recently said the Federal Government's decision not to extend the mandatory renewable energy targets (MERT) scheme would stifle windfarm development after 2008.

But Willis now said he hoped this type of deal would encourage the Government to reconsider.

Hydro Tasmania is scheduled to start exporting power from its hydro-electric dams and wind farms from November. Construction of the Basslink cable to connect the Tasmania and mainland electricity grids is continuing.