The Abbott government’s ruminating on its next renewable energy attack hit yet another snag this week, when new independent research commissioned by The Climate Institute, WWF and the Australian Conservation Foundation finding that reducing the Renewable Energy Target (RET) will not cause power bills to fall, but will rather represent a $10 billion windfall for fossil generators over the next 15 years.
The Government’s hand-picked renewable-hostile RET review panel is expected to report back shortly, and reports from inside sources make two things clear. Firstly: the Government appears to be engineering a cut to the target and is softening up the conversation by alluding to a possible abolishing of it altogether (although it denies this).
Secondly: early feedback from the review panel awkwardly contradicts PM Abbott’s rhetoric demonising the RET for price rises. Government commissioned and independent modeling alike shows that consumers will be better off with the RET staying as it is. Any case the Government may want to put for cutting the RET because it’s a burden on struggling families has collapsed before it has had a chance to argue it.
“We have to accept that in the changed circumstances of today, the renewable energy target is causing pretty significant price pressure in the system and we ought to be an affordable energy superpower.” Prime Minister Tony Abbott in 2013.
“Our position is to keep the renewable energy target in place. The government remains committed to the renewable energy target.” Liberal Senator Mathias Cormann.
As it currently stands, the RET is set to deliver 20 per cent, or 41,000GWh of electricity via renewable sources by 2020, but due to lower than expected demand it is currently on track to deliver 28 per cent by then. This is what is driving calls from fossil generators and politicians sympathetic to them to turn the RET into a “real 20 per cent” by cutting the target to 27,000GWh.
Given 99 per cent of submissions received by RET review panel supported the target as is, and a separate Senate inquiry into the government’s plan to scrap the Australian Renewable Energy Agency found similar support, the continued mixed messages coming out of the Government do appear to be more about softening up the public for a cut to a “real 20 per cent”.
A typical NSW household annually using 6.5 megawatt-hours of electricity would pay $35 more a year if the RET is reduced if the RET was reduced as suggested by AGL, Origin and other fossil utilities, and an additional $80 if abolished. That this will come at the expense of the renewable industry (which has been going gangbusters, supporting new non-mining economic growth), jobs, and consumers would be regrettable, but worse still reducing the RET to 27,000GWh will lead to an additional 150 million tonnes of carbon being released into the atmosphere by 2030, further undermining any emissions reduction “direct action” the Government takes.
“Power producers don’t want to change the RET so they can charge less for electricity. The reason they oppose it is that they want to make more money.” Deputy chief executive of The Climate Institute, Erwin Jackson.
Overall, like the recent move in Queensland to restructure electricity pricing and charge businesses $500 a day to read the meter – which has not led to higher electricity prices, but rather carefully adjusted the way things are charged to discourage the switch to grid-tied solar – the push to weaken the RET is cynical, motivated by self-interest, and ultimately to the detriment of consumers and the environment.