The federal government has announced it wants to reduce the Renewable Energy Target to a “real 20 per cent”, which it said was the original bipartisan intent when the target was created.
“The Government is committed to supporting a sustainable renewable energy sector with an amended Renewable Energy Target that will ensure long-term certainty for the renewables sector so it can continue to contribute to Australia’s diverse energy mix,” a joint statement by industry minister Ian Macfarlane and environment minister Greg Hunt said.
When the original target of 41,000 gigawatt hours of renewable energy generation by 2020 was set, it represented 20 per cent of estimated electricity generation for that year. It was not envisaged that demand for electricity would be as low as it has been. Consequently, the target as it is would be around 27 per cent.
Reducing the target to around 26,000GWh would be closer to 20 per cent.
“It won’t be a 27 per cent Renewable Energy Target. It will be a 20 per cent Renewable Energy Target, which I think is what Australia signed up for,” Mr Macfarlane said.
Also revealed was that “support for household solar systems” would remain. The RET review had recommended ending the Small-scale Renewable Energy Scheme. The government also wants energy intensive trade exposed sectors, such as the aluminium industry, to be excluded.
Labor rejects the proposal
The Abbott Government’s plan to cut the Renewable Energy Target by more than 40 per cent will ruin the renewable energy industry, cost thousands of jobs and see investment move offshore, shadow minister for environment Mark Butler said.
“The Abbott Government has tried its hardest to destroy the industry with its politically-motivated Warburton Review and its adoption of one of the Review’s recommendation stands to be devastating news for renewable energy businesses,” Mr Butler said.
Labor’s legislated RET of 41,000GWh by 2020 is an overwhelming policy success. Jobs in the sector have tripled, there has been more than $18 billion in investment and homes with solar panels has increased to 1.3 million.
In September 2013, Australia was ranked in the top four most attractive places to invest in renewable energy, with the US, China and Germany. Since Tony Abbott’s interference with the RET, Australia is now ranked 10th.
The Abbott Government’s own modelling shows the RET will drive down power prices in the medium term.
Yet, despite the overwhelming evidence of its success, the Abbott Government is still looking to wind back the RET by more than 40 per cent.
Tony Abbott shattered the bipartisanship the industry has enjoyed for more than a decade when he walked away from the RET after the election and appointed a climate sceptic to head the RET Review.
We will continue to talk to the Government but Labor will not be party to a plan that kills jobs and investment, increases carbon pollution and forces power prices to rise.
Move would “crush” clean energy sector
The Australian Conservation Foundation said the government’s position would crush the growth of the clean energy industry, and a “real” 20 per cent target, which could change year-to-year depending on electricity demand, would provide no certainty.
“If the government’s aim is to kill renewable energy in Australia, it’s on the right track,” ACF climate change program manager Victoria McKenzie-McHarg said.
“The Renewable Energy Target has been working as intended, with investors spending billions on new clean energy projects in Australia, creating jobs and cutting pollution.
“The proposal for a floating target would give investors absolutely no certainty to continue making these investments.”
The Green Building Council of Australia said it was disappointed with the government, and that a change to the RET would be a retrograde step.
“We are disappointed with the Australian Government’s position on the Renewable Energy Target,” GBCA chief operating officer Robin Mellon said.
“The RET has supported investment in renewable energy solutions across Australia, contributing to reduced emissions intensity in our national energy market and reducing energy bills for building owners and tenants alike
“It has encouraged more than 15,000 businesses to invest in solar power which has, in turn, supported more than 13,000 jobs, benefitting the Australian economy and boosting our international competitiveness.”
The Australian Wind Alliance said the move would lead to higher bills.
“Cutting renewable energy leads to higher prices for consumers to pay for higher profits for big power companies,” AWA national coordinator Andrew Bray said.
The Australian Industry Group, however, said the government’s announcement was a good starting point for negotiations.
“The Government and the Opposition need to come to a bipartisan position on the RET – this would be positive for stability, confidence and investment,” AIG chief executive Innes Willox said.
“We urge all parties to be in close consultation with industry so the details of proposals and compromises are tested with industry before they are finalised in a deal.”
Labor seems not prepared to consider a real 20 per cent target, with opposition leader Bill Shorten in parliament saying it was a fraud.
“The government wants a real 20 per cent. I call it a fraud 20 per cent. A fake 20 per cent.”