The ACT is "punching above its weight" compared to other jurisdictions with the most ambitious emissions reduction and renewable energy targets in the country, the Climate Council's latest report reveals.
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Along with South Australia, the ACT is "winning the Australian renewable energy race" putting it in the "best position to reap the benefits of the global shift to cleaner energy", the report comparing the renewable energy policies of all states and territories said.
The ACT aims to source 90 per cent of its electricity supply from renewables by 2020; currently it's at 20 per cent.
In comparison, South Australia has a renewable energy target of 50 per cent by 2025 but is already sourcing around 33 per cent of its electricity from renewable sources.
The report praised both for "ambitious targets to cut emissions and increase renewable energy uptake" at a time when uncertainty around Australia's weakening Renewable Energy Target (RET) was causing renewable energy investment to drop up to 70 per cent in the past year.
The ACT has the country's lowest emissions per capita because of its small population and lack of heavy industry, but the Climate Council's chief councillor, Professor Tim Flannery said despite its small scale its policies set a "powerful example" that could be adopted by other jurisdictions.
"It's a winning combo, the ACT has come up with really great model for shifting to the clean energy economy at reasonable speed at minimal cost," he told the Canberra Times.
"If you can achieve that transition, a couple of years in, Victorian and NSW politicians will be looking at the ACT saying 'why have they attracted billions of dollars of foreign investment and created all these jobs while we're still languishing?'."
Professor Flannery praised the ACT's reverse auction system where renewable energy companies compete for access to a feed-in tariff – the first of its kind in Australia - and said it was already making a difference.
"You've had your first wind auction for 400 megawatts this year and there's 18 proposals coming up which is fantastic," he said.
He said the ACT's target of reducing emissions to 80 percent below 1990 levels by 2050, with the interim target of 40 percent by 2020, was the most ambitious in the nation.
South Australia aims to reduce emissions to 60 percent below 1990 levels by 2050.
Environment Minister Simon Corbell said the ACT had the largest per-capita consumption of voluntary renewable energy generation in Australia - equal to around 1 per cent of its electricity consumption.
"The renewable energy inventory and targets are consumption-based and renewable investment flowing from that can be directly attributed to the ACT's policy settings," he said.
"The Climate Council report makes it clear that the ACT is one of the national renewable energy leaders."
The ACT fell behind when it came to houses with solar panels, of all jurisdictions the ACT was in fifth place with 11.7 per cent of dwellings having solar PV, the report said.
But Mr Corbell said the ACT had a "significant penetration" of rooftop solar generation, rising from less than one megawatt of capacity in 2008 to 44MW in 2014.
The report said Australia's states and territories could act as leaders tackling climate change and growing Australia's renewable energy industry, mirroring the US where state-based targets and incentives had made the country second in the world for installed renewable energy capacity.