Renewable Energy Target review 2014
Tony Abbott wishes to become known as the infrastructure Prime Minister. He has also declared Australia ‘open for business’.
If he allows the renewable energy target (RET) scheme to be reduced or dismantled, both these declarations become erroneous, as it would cripple this piece of Howard Government initiated infrastructure and thereby put at risk both domestic and international business investment.
Since 2001, the RET has, via the large-scale renewable energy target (think hydro, solar/wind farms) and small-scale renewable energy scheme (think residential solar pv/hot water/heat pumps), provided a financial incentive to generate an estimated $18.5b of investment in renewable energy as a healthier, less environmentally-damaging, less water-intensive alternative to fossil fuel sourced energy (which still receives more than 6 times the subsidies of its farming-friendly counterpart). Removing or reducing the financial incentive undermines the infrastructure, disrupts business continuity and weakens investor confidence.
The RET has helped build a renewable energy industry now employing some 24,000 people, many in regional Australia, which in particular has enjoyed job transition opportunities. Maintaining it will increase investment to 2020 by a projected $18.8b with a carbon price and $8.9b without, as well as creating in excess of 18,000 jobs; diluting the target will inevitably result in job losses and fewer opportunities.
One of the RET’s primary objectives is “to reduce emissions of greenhouse gases in the electricity sector”. It has achieved a reduction so far of 22.5 million tonnes. If it is removed, an estimated 34.7 million tonnes of additional carbon emissions will be released by 2020.
The last RET review was undertaken in 2012 by the Climate Change Authority, a government body with a board of directors comprising respected business heads Bernie Fraser, John Marley and Heather Ridout and eminent scientists Professors Ian Chubb CA, David Karoly, Clive Hamilton and John Quiggin. The government’s response in April 2013 “agrees that full reviews every four years would provide an appropriate balance between flexibility in the scheme and policy stability for investments” (regrettably failing to enshrine this recommendation in law) and ”notes that modelling conducted for the Review found that reducing the target would not result in a material reduction to average household electricity bills and would not justify the damage to investor confidence that would be caused by such a change.” The government’s response also states “The RET is designed to be technology neutral, which ensures the target is met at lowest cost.”
The Abbott Government’s non-statutory review, just 18 months after the last review, is putting the clean energy sector at risk, and threatens to rob communities of the opportunity to benefit from the emerging community energy sector. Prior to election, Greg Hunt repeatedly stated, “We agree on the science; we agree on the targets; we agree on market mechanisms.”
If the government breaks their renewable energy promise, it may be many years before we see communities benefit from their own community-scale clean energy projects.
Modelling recently commissioned by the Clean Energy Council indicates the removal of the RET would increase electricity bills by $50 by 2020, beyond that by up to $140, with reduced competition and inevitably higher gas prices as major contributors. Maintaining the RET effectively insures against rising gas prices, encouraging renewable energy supply to offset the need for gas-fired back-up to the grid.
On 2 February 2010, on the ABC’s 7.30 Report, Tony Abbott said, “The climate change argument is absolute crap, however the politics are tough for us because 80 per cent of people believe climate change is a real and present danger.”
With 97% of the brightest amongst us in the climate science community supporting man-made climate change as evidence-based, not a faith, this majority of the Australian electorate has a conviction, not simply a belief. A similar majority have shown consistent support for renewable energy. Tony Abbott agrees, saying “Renewable energy makes a lot of sense.”
Displacing the extraction of buried fossilised carbon with the harnessing of free and abundant energy sources is logical. Building a globally significant industry to service this with world class research centres and natural resources which are the envy of the globe is already achieved. Downgrading the RET risks losing our competitive advantage. Keeping the 41 TWh target will best place this most promising Australian industry to deliver according to plan.
Improving its efficiency is a challenge worthy of an infrastructure Prime Minister.