The Renewable Energy Target was implemented in January 2011 to help ensure that 20 per cent of Australia's electricity comes from renewable sources by 2020. It works by creating financial incentives to drive both large- and small-scale investment in wind and solar energy. But in February, Tony Abbott appointed climate change sceptic Dick Warburton to review it. While government ministers have made vague assurances that the RET would stay, Abbott himself has always been highly critical of it. He regularly parrots the coal industry's line that the RET is driving up electricity prices, and even told an industry lunch earlier this month that his government had already decided to amend it despite not yet having received the Warburton report.
The government will formally respond to the report next month. But the whole debate about the RET is almost entirely disingenuous. In fact, the RET contributes about 4 per cent to the price users pay, which has doubled in the last five years. (For the record, the carbon price was responsible for under 10 per cent of the price rise.) As Jess Hill makes clear, the real driver of the price increase has been a massive, government-backed over-investment in both "poles and wires" infrastructure and new coal generators in an era of falling demand for coal-fired power delivered through the grid. Privatised and government-owned power companies, worried about their revenue forecasts as the RET encourages households to invest in solar, have lobbied hard to abandon the RET.
What might otherwise be the result of fair competition and environmental policy is instead being presented as a reason to ensure "investment certainty" in a carbon-intensive industry. But the government's attacks on the RET – even its decision to review it – have created enormous uncertainty in the renewables industry. Meanwhile Australia's power prices are now among the highest in the world, and are equivalent to those in Germany, which now generates over 30 per cent of its energy from renewable sources.
Russell Marks Politicoz Editor
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