Prime Minister Tony Abbott wants "more work" done on scrapping the RET.

Reports across the media this morning have alleged Prime Minister Tony Abbott asked Renewable Energy Target review head Dick Warburton to do “more work” on the option of terminating the RET altogether, after Warburton’s initial review recommended scaling the target back to the “real 20 per cent” figure based on current electricity demand.

The news has sent “shockwaves through the industry,” according to the Clean Energy Council. The announcement has also seen at least one multi-million dollar major project now shelved, with the firm behind it, Silex, now looking to shift its focus to offshore.

Clean Energy Council acting chief executive Kane Thornton described government attacks on the RET as “reckless”, pointing out that the government’s own analysis to date has shown slashing or scrapping the RET will “save no money on power bills, yet would devastate billions of dollars of investments made in good faith in renewable energy projects across the country”.

“It would also be out of touch with the vast majority of Australians who want more renewable energy, as demonstrated by the fact that 99 per cent of the 24,000 submissions to the review of the policy called for it to be maintained or increased – and the fact that over four million Australians already live or work under a solar power system. Australians clearly want to follow the rest of the world in increasing the use of renewable energy,” Mr Thornton said.

“The Australian renewable energy industry has invested over $20 billion and currently employs over 20,000 people based on the legislated RET.”

New Climate Industry report released today backs the susty facts

The Climate Institute today released independent analysis carried out by Jacobs on behalf of the Institute, the Australian Conservation Foundation and WWF-Australia on the impact of reducing or axing the RET. Jacobs’ modelling showed the beneficiaries would be owners of coal-fired power plants at the expense of households and small business.

The report finds that weakening the RET would result in $8 billion additional profit to coal and $2 billion to gas generators (net present value of future profits 2015-2030).This includes $2 billion in extra profit for EnergyAustralia, $1.5 billion for Origin and $1 billion for AGL.

Bills could rise

It also finds there would be no saving on energy bills. In fact they could increase slightly with an extra $30 on average added to an annual household power bill, the majority of which would take place after 2020.

Under the reduced RET there would also be additional carbon pollution of about 150 million tonnes to 2030 (equivalent to adding nearly four million cars to the road) with additional pollution costs of over $14 billion, and a loss of $8 billion in investment in new renewable capacity, with New South Wales and South Australia each standing to lose over $2 billion in foregone investment.

“This modelling highlights the cynical self-interest behind power companies’ calls to weaken the Renewable Energy Target. Companies like Origin and EnergyAustralia are pushing to weaken the target not, as they like to claim, because that would be good for customers, but because a weaker target is better for their bottom line,” said John Connor, chief executive of the Climate Institute.

“The RET is a bipartisan policy that is effectively reducing carbon pollution from the electricity sector and building our nation’s renewable energy industry. Both these objectives are vital – they help avoid dangerous climate change and sensibly position Australia’s economy to remain competitive in a world moving to clean energy sources.”

  • Find the report here

Kelly O’Shannessy, chief executive of the Australian Conservation Foundation, said power companies were trying to hide behind customers to undermine Australia’s efforts to become a clean energy leader.

“This research shows the power companies have eight billion reasons to attack clean energy and they have actually forgotten about their customers – and the air we all breathe,” she said.

Major projects already going to wall

Projects are already going to the wall, with Silex Australia this morning announcing wholly-owned subsidiary Solar Systems’ proposed 100MW Mildura Power Station Project, located in Carwarp, near Mildura in Victoria, has currently been shelved.

In an ASX announcement, the company stated that following a joint review by the Australian Renewable Energy Agency (ARENA) and Solar Systems, both parties have agreed to suspend plans for the project and accordingly terminate the funding deed for $75 million of conditional support for the project from ARENA.

Silex states the decision was based on a number of factors, including low wholesale electricity prices and the uncertainty surrounding the Renewable Energy Target. Due to these circumstances, the $35 million in conditional funding from the Victorian Government under the Energy Technology Innovation Strategy Fund will also be terminated.

Silex CEO and managing director Dr Michael Goldsworthy said, “After careful consideration of project economics, we have decided to reassess plans for the Mildura 100MW Solar Power Station. Since we launched the 1.5MW Mildura Demonstration Facility in June last year, we have captured a great deal of useful data and are now investigating alternative opportunities to build on the outstanding work already achieved at the Mildura site.

“We believe that concentrated photovoltaic technology has a strong future in delivering clean, low cost energy to supplement base load power in many suitable regions around the world and we continue to assess deployment of our unique ‘Dense Array’ dish technology in prospective offshore markets.”

The Fifth Estate will update this story as more reactions emerge.