Sep 05, 2014 - 10:00am
This article first appeared in The Advertiser on 5 September 2014.
Board Member, The Climate Institute
The Renewable Energy Target (RET), was introduced by the Howard government in 2001 to increase Australia’s supply of renewable energy. It was part of our Kyoto commitment in 1998 establishing our credentials in combating climate change. The RET is currently being reviewed by the Abbott Government.
Its purpose was to underpin the growth of the renewable energy industry, enabling the expansion of hydro power, wind and bioenergy infrastructure and to encourage emerging renewable technologies like solar and geothermal, where Australia was a world leader in research and development.
The RET has been reviewed several times with bipartisan support. It was meeting its objectives, attracting local and international investment, building projects, employing thousands of Australians and producing emissions-free electricity when it was increased from the original 2001 level in 2007.
It was accepted there would be a small cost to consumers – about the cost of a cup of coffee a week.
We need a strong signal from the Government that it supports the RET to
restart investment and maintain our renewable energy industry.
Both sides of politics recommitted to the RET at following elections, providing stability for investment and growth. Leading solar and wind companies came to Australia bringing billions of dollars for projects and investing in Australian R & D.
A number of economic reports by nationally-credible economists, including the Abbott Government’s own review, found that the RET would provide a net cost reduction to electricity costs towards the end of this decade.
The review team claims that we have an oversupply of electricity, so the RET has to be cut. The economic slowdown from the GFC, energy efficiency and household solar have reduced demand. Also, when the RET was introduced, it was intended that much of our ageing coal generation plant would soon be retired from operations, but this hasn’t happened.
We need excess generation capacity to allow for maintenance and unplanned shutdowns and for short periods of peak demand when our air conditioners run full speed. Peaking plant operators are able to charge up to 200 times the average rate at peak times. This all increases our power bills.
Renewable energy is changing these historic patterns. Rooftop solar is making a real impact, now producing 6 per cent of our electricity. Because it produces power when prices peak, it reduces the amount of peak power costs in our power bills, offsetting the cost of the RET.
Wind farms are now supplying much of SA’s electricity, forcing other generators to charge lower prices to compete. Many of their power stations were bought since the RET rules were well known.
Renewable energy companies are halting investment and research in Australia because of the negative signals around the RET’s future.
Australia will fall behind in technology development, lose investment dollars and lose jobs – many hundreds here in South Australia. On the Government’s own predictions, power bills will go up and old fossil fuelled operators will continue pumping out emissions from power stations long past their use-by dates.
We need a strong signal from the Government that it supports the RET to restart investment and maintain our renewable energy industry.Susan Jeanes is a director of the Climate Institute and chair of the Centre for Energy Technologies Advisory Board at Adelaide University and chair of the SA Centre for Geothermal Energy Research Advisory Board at Adelaide University.
Susan Jeanes is Principal at Jeanes Holland and Associates and is Chair of the Advisory Board at the University of Adelaide’s South Australian Centre for Geothermal Energy Research. Susan has previously served in a number of advisory roles in the clean energy research sector and has worked in the political arena, serving in the Federal Parliament as the Member for Kingston. Susan has also worked as an Advisor to the former Environment and Heritage Minister Robert Hill on climate change and energy policy and advised a number of shadow ministers in various portfolio areas prior to 1996. She also held the position of CEO of the Renewable Energy Generators of Australia until October 2007 and CEO of the Australian Geothermal Energy Association until 2013.