20 May 2014 — The Australian Industry Group has come out in support of the Renewable Energy Target, saying that it acts to suppress wholesale energy prices, and cutting the target as it stands would “not advance energy users’ interests”.
Innes Willox, chief executive of the conservative industry lobby group, said that the RET review was an opportunity to make “sensible, bipartisan improvements” to the RET but that deep cuts or abolishing the target would not benefit energy users.
“The RET has swings and roundabouts for energy users,” Mr Willox said. “The cost of building wind farms and solar panels is passed on to retail customers. But the extra energy generated adds to supply in the electricity market, depressing wholesale prices somewhat.
“After consulting with our diverse membership and reviewing the evidence currently available, we have judged that reducing the RET is likely to cost energy users as much in higher wholesale prices as it saves them in direct RET charges.”
Mr Willox said renewable energy investment had been held back by policy uncertainty, and meeting the 41,000 gigawatt-hour target had been jeopardised, however current evidence showed cutting the target below this point was not in energy users’ interest.
“If there is a genuine risk of missing the target and incurring penalties, the target should be trimmed,” Mr Willox said. “But on the current evidence base, cutting the target below this point would not advance energy users’ interests.”
The move follows AGL coming out against the RET in its current form, saying that policy uncertainty had made achieving the Large-scale Renewable Energy Target of 41,000 gigawatt-hours unlikely. Ironically, much of the policy uncertainty has been caused by the review.
AGL also called for the small-scale renewable energy scheme to be scrapped, saying solar was already attractive without government support.