4 June 2014 — South Australia’s huge clean energy industry, producing clean low-cost wholesale electricity, jobs and more than $5 billion of investment for the state, would be under threat if the Renewable Energy Target were removed the RET review panel has been told as it held a public hearing in Adelaide on Wednesday.
The warnings came as a flood of submissions on the RET review poured in from around the country, most concerned that the Abbott government’s anti-renewable energy bias, would see the RET removed or severely diminished.
In its submission the South Australian Conservation Council warned the panel that current and future investment in renewables in the state was under threat.
“In SA we have had $5.5 billion of investment in renewables driven by the federal target. Together with supportive state government policies, this has given us the fastest growth in renewables in the country, bringing new jobs and lower wholesale electricity prices,” SACC chief executive Craig Wilkins said.
“There is a further $4.5 billion in the pipeline. This massive investment, particularly in rural SA, is now at risk.”
South Australia is the largest producer of wind power in the country and, according to the Australian Energy Market Operator, generates a quarter of the state’s electricity.
Alan Pears says incumbents have distorted the debate
RMIT sustainability researcher Alan Pears, in his submission to the RET Review, said the RET was compatible with the Productivity Commission and government’s support for privatisation of the energy sector.
“The RET is a key driver of privatisation: around 1.3 million households are now private generators, while the renewable energy industry is privately owned and operated,” he stated.
Mr Pears’ submission stressed that policies, information and pricing have in many cases been distorted by the incumbent power industry interests of the coal and fossil fuels sector.
“The behaviour of members of the incumbent electricity industry, and policy failures by the Ministerial Council, AEMC and government energy policy makers have led to unnecessarily high electricity costs and price distortions, as documented by the Productivity Commission (2013) and the 2012 Senate Inquiry.
“From a consumer perspective, addressing these issues would have a much more significant impact on energy service costs and economic efficiency than changing the RET.
“It makes more sense to remove existing distortions associated with centralised fossil fuels and infrastructure than to undermine a growing and essential industry.
“For the incumbent industry to blame the RET for electricity service cost increases while they behave in the ways they have done is hypocritical and works against the interests of consumers – contradicting a key requirement of the National Electricity Objective (as emphasised by the Productivity Commission 2013 report). Focusing on the RET without addressing these issues is a form of victimisation that also happens to benefit the incumbent industry.”
Industry opinion differs
The Aluminium Council in its submission supports abolishing the RET, arguing it has not been efficient in reducing emissions in the electricity sector, and that it impacts disproportionately on the power-intensive aluminium refining and manufacturing sector. It has requested a full exemption from the RET to take effect no later than 1 January 2015.
In contrast, Origin Energy in its submission supported the RET, with the condition that the company would like to see a single RET (with LRET and SRET rolled in together) with deeming removed, and set at the original 20 per cent target [since recent falling demand has meant that the total renewable energy required by the 20 epr cent RET target leads to higher levels of renewable energy than anticipated]. The current RET target would require the building and installation of about a further 1500 MegaWatts of wind generation and another 3000MW of solar PV generation between now and 2020.
The published submissions to date can be accessed here.