ACT News

Renewable energy target: Labor and the government agree to a number but sticking points leave local projects on ice

The government and Labor have agreed in principle to a large scale renewable energy target of 33,000 gigawatt hours, but a proposal to include the burning of native timber in the scheme could still scupper a deal.

The possibility of continued stalemate and future reviews has frustrated companies behind proposed Canberra region projects in NSW, some of which recently missed out in the ACT renewable energy auction.

Environment Minister Greg Hunt, pictured with Industry Minister Ian Macfarlane, in Melbourne on Friday.
Environment Minister Greg Hunt, pictured with Industry Minister Ian Macfarlane, in Melbourne on Friday. Photo: Chris Hopkins

After almost 18 months of deadline over clean energy policy in Australia, the final figure was reached during talks between the parties in Melbourne on Friday.

Cabinet and Labor's shadow cabinet and caucus still have to sign off on the proposal, which would also leave the small scale rooftop solar scheme untouched, next week.

"We have the basis to proceed and so my hope and expectation is that the renewable energy target issue will be resolved precisely as we said prior to the election," Environment Minister Greg Hunt told a media conference in Melbourne.

Industry Minister Ian Macfarlane said he was confident that "one way or another" the government would resolve the disagreement over the burning of timber from native forests as part of the deal.

He said he was confident the government could pass that element of the proposal through the Senate.

"We'll move the legislation in the House of Representatives inclusive of wood waste," Mr Macfarlane said. 

"We will be relying on the Labor Party's support to carry the bulk of the legislative amendments which will include the 33,000 gigawatt hour target, but we would expect that the crossbench would support us on wood waste."

Labor's environment spokesman Mark Butler said:  "I think we've now got a position that is the basis for a serious discussion, the possibility to get investment started again."

But he said the opposition would consult the clean energy industry before agreeing to a deal.

He said there was no case for native timber burning to be included in the scheme, and he described this suggestion as a last minute "red herring" from Prime Minister Tony Abbott.

"I want to be very clear that Labor will not be accepting this proposal from the government," he said.

Mr Butler added that Labor would prefer the target was kept at its original level of 41,000 gigawatt hours and would move to increase the 2020 target if elected in 2016.

The two parties have been deadlocked since the government last year launched its Warburton review of the bipartisan renewable energy target, which had been set at 41,000 gigawatt hours by 2020.

The government's first offer was a so-called "true 20 per cent" figure of about 26,000 gigawatt hours, while Labor called for a number in the mid to high-thirty thousands.

Last month, renewables peak body the Clean Energy Council put forward a compromise figure of 33,500 gigawatt hours which Labor said it would accept, but the government rejected it.

Investment in renewable energy in Australia dived by 88 per cent in 2014 after the government launched its review of the target.

The deadlock has also hindered investment in a spate of Canberra region proposals, including Infigen Energy's Capital II wind farm and solar farms near Bungendore and RATCH Australia's Collector wind farm.

RATCH Australia's Collector project manager Anthony Yeates said he was glad a figure had been announced.

"I don't think anyone in the industry is happy with the reduced target but the review has dragged on far too long and we are just glad a bipartisan agreement on the target has finally been reached," Mr Yeates said.

But, echoing others in the industry, he said the inclusion of future two-yearly reviews in the deal was most concerning.

"We understand that the prospect of two-yearly reviews remains a possibility. These reviews are the cause of this impasse, and need to be abolished to give the industry the certainty it needs to proceed," he said.

The Clean Energy Council said a "welcome end" to the crisis could be in sight and the sector would reluctantly accept a resolution of 33,000 gigawatt hours.

But chief executive Kane Thornton said the council would not support the burning of wood from native forests counting as a renewable energy source "unless it can be verified as coming from sustainably managed forests".

"It is important these matters are resolved quickly and that a clear bipartisan deal is landed as quickly as possible, to restore the bipartisanship necessary for the sector's future," he said. 

The Climate Institute chief executive John Connor said the compromise was "at best a Band-Aid" and joined angry criticism from the industry that legislation to review the RET every two years had been retained.

Australian Solar Council chief executive John Grimes said: "The government review process killed the renewable energy industry and they've just announced that the next review will start in seven months' time.

"This is the most cynical political ploy and shows what the government's real intentions are."