A crucial day for the renewable energy sector. Photo: Nicolas Walker
Coal miners have launched a last-minute lobbying bid against the extension of the Renewable Energy Target (RET), releasing a study challenging the policy’s effectiveness.
The independent Climate Change Authority is due to reveal its final recommendations on the RET review at 10am AEDT this morning, in a decision likely to be closely watched by the electricity industry.
The authority’s draft report in October backed the retention of the current settings even though renewable energy sources such as wind and solar power are on course to exceed the goal of 20 per cent of total generation by 2020, arguing changes to the policy would create uncertainty for investors in the sector.
The Australian Coal Association (ACA), a lobby group representing coal miners, said an assessment prepared by the Centre for International Economics found the RET failed five key measures of policy effectiveness.
ACA Chief Executive Officer, Nikki Williams, said the RET was ineffective in encouraging carbon dioxide abatement, research, development and demonstration (RD&D), enhancing energy security, providing investment certainty, and acting as a supportive policy for the carbon tax.
“These renewable sources are currently more expensive than other sources such as coal,” Dr Williams said in a statement. “Therefore the quota amounts to a tax on consumers and fossil fuel generators, to subsidise renewable generators.”
The ACA earlier called for the RET to be removed, with existing rights to be “grandfathered” or compensated, in its submission to the CCA’s review.
The coal industry’s complaint echoes calls from large fossil-fuel based electricity generators, many of which are struggling to remain profitable as weaker-than-expected power demand has sent wholesale electricity prices tumbling.
The renewable energy industry, meanwhile, remains confident the CCA will recommend leaving the key goals of the RET unchanged, particularly the target of sourcing 41,000 gigawatt hours a year by 2020 from large-scale sources.
“Given what CCA said in the draft report, we’re not expecting significant changes” to the large-scale renewable energy target, said Russell Marsh, policy director of the Clean Energy Council.
“Without the RET you wouldn’t really see wind development …or any renewable energy being developed,” he said.
The CCA, though, may recommend further changes to the uncapped Small-scale Renewable Energy Scheme after the take-up by households of solar photovoltaic panels exceeded expectations.
The government and the Coalition have said they back the 20 per cent RET goal. The Greens have called for the target to be raised.
“I hope the Climate Change Authority stands firm in the face of fossil-fuel lobbying,” Greens leader Christine Milne said on Tuesday. “What we actually need is to shift to 100 per cent renewable energy as soon as possible, so we should set a minimum goal of 50 per cent by 2030.”
The CEC, which lobbies for the renewable energy industry, estimates that retaining the current RET settings will see another $18 billion invested in the sector by 2020, more than doubling investment so far under the scheme.
The CCA’s recommendations will be considered by the government, which may take months to settle on a final decision.
The longer the delay in getting final approval of the review, “the longer the delay in getting actual investment into renewables”, Mr Marsh said.
Some nations are seeking more ambitious targets for renewable energy, such as Scotland’s goal of sourcing half its power by 2020 from renewable activities. Germany aims for 35 per cent by then and a reduction in energy consumption by 10 per cent, although a report out overnight suggests current policies will see achievements fall short of those goals.