18/02/2014 - 08:41

Mixed signals on renewable review

18/02/2014 - 08:41

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Mixed signals on renewable review
The federal government has begun it's review of the renewable energy target.

Western Australia’s peak business body for sustainable energy has welcomed the federal government’s review of the Renewable Energy Target, welcoming the challenge to reveal the benefits of the RET amid questions over its value by some business groups.

Sustainable Energy Association of Australia chief executive Kirsten Rose said the review was an opportunity for the renewable energy industry to reiterate the substantial benefits of a stable target to the Australian economy, but expressed concern about the choice of review panel’s head, Dick Warburton.

The Business Council of Australia, which also welcomed the review, said it would allow the government to investigate whether the RET was unduly influencing higher electricity prices.

Industry Minister Ian Macfarlane said the review would consider the contribution of the target to emissions reduction, its impact on electricity prices and energy markets, as well as its costs and benefits.

The RET was introduced by the Howard government in 2001 and expanded by the Gillard government in 2009 to mandate that 20 per cent of Australia’s energy come from renewable sources by 2020.

The RET works by creating and selling certificates that create financial incentives for investment in renewable energy through large and small-scale schemes.

The review and appointment of Mr Warburton has worried some advocates of the RET, however, who fear it may be used as cover to reduce or scrap the target, particularly as Mr Warburton has publicly questioned the science of climate change and the Abbott government has stated that the RET is in part to blame for increasing power prices.

“We are a bit concerned about the choice of Dick Warburton to lead the review, given his past comments questioning mainstream science around climate change,” Mrs Rose said.

However, she dismissed concerns the review would not be open and transparent, and said she was pleased for a chance to properly investigate and demonstrate the benefits of the RET.

The Business Council of Australia said the review should also look at changed circumstances, including how the proposed repeal of the carbon price would affect the electricity market. It also should ensure that the RET’s lack of responsiveness to changes in demand were not adding to increased electricity prices, the council said.

Mrs Rose said the SEA was confident the review would demonstrate that the benefits of the RET far outweighed the costs, which she said had been estimated to be less than 5 per cent of an electricity bill.

“The renewable energy industry can demonstrate that the RET delivers a powerful outcome (of) jobs and investment, together with clean energy at lowest cost. That combination of benefits will be particularly attractive to Australians right now,” she said.

The RET review panel includes Australian Energy Market operator Matt Zema, former head of Australian Bureau of Agricultural and Resource Economics and Sciences Brian Fisher, and former head of Verve Energy Shirley In't Veld.

Mrs Rose said she was pleased to see that Ms In't Veld was involved.

“Her knowledge of the renewable energy resources and opportunities in WA is excellent, having delivered a number of renewable projects here in her time at Verve. She will also understand the opportunity for renewables in the resources sector and in off-grid locations, and how the RET is critical to development in that sector,” she said.

The review will be provided to the government by the middle of this year.

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