Business defends renewable energy targets

Australian business leaders have mounted a defence of the Federal Government’s Renewable Energy Target. In submissions to a review of the policy, expected to lead to a final report before the end of this year, key business organisations and companies have urged ministers to stick to its plan to generate 20 per cent of Australia’s energy from renewable sources by 2020. But tougher targets are opposed.

By COLIN MACGILLIVRAY

BUSINESS has mounted a defence of the Federal Government’s Renewable Energy Target, urging ministers to protect investment in renewables in its current policy review.

The appeal was made in submissions to the new Climate Change Authority’s review of the Renewable Energy Target (RET) scheme – that commits Australia to generating at least 20 per cent of its energy from renewable sources by 2020.

Among those calling for the scheme to continue with unchanged targets for the introduction of wind, solar and hydro power are energy giant AGL, GE, the Business Council of Australia and the Australian Industry Group, which represents 60,000 businesses across the country.

A discussion paper on the future of the RET is expected within weeks, and a final report will be presented to Government by the end of the year.

While the Business Council of Australia (BCA) warned that it remained sceptical the RET would deliver lowest-cost emissions reductions and said in its submission that, with carbon pricing, the scheme was one of the “contributors” to “rapidly increasing electricity and gas prices”, the organisation urged Government to stop short of changes to the RET that would “adversely affect investments that have already been made” and “mindful of their impact on investments currently being planned or already seeking approval”.

The Australian Industry Group (Ai Group) had opposed the introduction of the RET in 2001, its submission made clear that it would be “concerned by any changes to the RET that affect the viability of investments that have already been made or are planned”.

Its paper added that the removal of the RET would “substantially outweigh” the costs of retaining the policy.

Despite misgivings about certain aspects of the scheme, the Government has defended the performance of the RET – which has bipartisan support – and insisted it is on track.

Mark Davis, a spokesperson for Climate Change and Energy Efficiency Minister Greg Combet said the Government would achieve the target through the implementation of a large-scale RET, which would account for most of the 20 per cent target, complemented by a small-scale renewable energy scheme.

“The LRET encourages the deployment of largescale renewable energy projects such as wind farms, while the SRES supports the installation of small-scale systems including solar panels and solar water heaters,” he said.

“Combined with other elements of the Gillard Government’s clean energy future plan, including a carbon price, the RET is expected to drive $20 billion of investment in large-scale renewable energy.”

Mr Davis added that the RET had only a “modest impact” on electricity prices, claiming the recent energy price hikes were due to network and distribution costs putting upward pressure on the market.