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| Abbott pushing for RET to be closed, despite impact on renewables | |
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| Tony Abbott is backing the closure of the renewable energy target (RET) for all new entrants – despite evidence that this would not reduce electricity prices and would devastate the solar industry and reduce the quantity of renewable energy delivered to Australians by about two thirds. | Tony Abbott is backing the closure of the renewable energy target (RET) for all new entrants – despite evidence that this would not reduce electricity prices and would devastate the solar industry and reduce the quantity of renewable energy delivered to Australians by about two thirds. |
| The Clean Energy Council acting chief executive, Kane Thornton, said closing the scheme to new entrants “would be reckless, given the government’s own analysis shows slashing the RET would save no money on power bills, yet would devastate billions of dollars of investments made in good faith in renewable energy projects across the country.” | The Clean Energy Council acting chief executive, Kane Thornton, said closing the scheme to new entrants “would be reckless, given the government’s own analysis shows slashing the RET would save no money on power bills, yet would devastate billions of dollars of investments made in good faith in renewable energy projects across the country.” |
| John Grimes, the chief executive of the Australian Solar Council, said the policy would mean that “there was no support at all for anyone putting in solar hot water and solar PV … locking people into spiralling electricity prices and taking away the one thing they can do to reduce their bills – namely go solar.” | John Grimes, the chief executive of the Australian Solar Council, said the policy would mean that “there was no support at all for anyone putting in solar hot water and solar PV … locking people into spiralling electricity prices and taking away the one thing they can do to reduce their bills – namely go solar.” |
| The government has long been divided over whether to pare back the scheme or close it down to new entrants – with both options being considered, and modelled, by the review, headed by businessman and self-professed climate sceptic Dick Warburton. The review delivered its report on Friday. | The government has long been divided over whether to pare back the scheme or close it down to new entrants – with both options being considered, and modelled, by the review, headed by businessman and self-professed climate sceptic Dick Warburton. The review delivered its report on Friday. |
| The option of closing the scheme to new entrants was widely seen as having the most support in government, including strong support from the prime minister, but the environment minister, Greg Hunt, is understood to have favoured paring back the RET. | The option of closing the scheme to new entrants was widely seen as having the most support in government, including strong support from the prime minister, but the environment minister, Greg Hunt, is understood to have favoured paring back the RET. |
| But when the Palmer United party said in June that it would not pass any changes to the RET in this term of government, the “paring back” option gained ground as more politically realistic, because it could be argued that the original intent of the policy was to deliver 20% of energy from renewables by 2020. Because of falling electricity demand, the RET’s designated 41,000 gigawatt hours will represent closer to 28% if the policy is left unchanged. | But when the Palmer United party said in June that it would not pass any changes to the RET in this term of government, the “paring back” option gained ground as more politically realistic, because it could be argued that the original intent of the policy was to deliver 20% of energy from renewables by 2020. Because of falling electricity demand, the RET’s designated 41,000 gigawatt hours will represent closer to 28% if the policy is left unchanged. |
| As well, several modelling exercises – including one done for the review itself – showed that closing the RET to new entrants would not reduce electricity prices – which was the reason given by the prime minister for reviewing the program in the first place. | As well, several modelling exercises – including one done for the review itself – showed that closing the RET to new entrants would not reduce electricity prices – which was the reason given by the prime minister for reviewing the program in the first place. |
| “We have to accept that in the changed circumstances of today, the renewable energy target is causing pretty significant price pressure in the system and we ought to be an affordable energy superpower … cheap energy ought to be one of our comparative advantages,” Tony Abbott said last year. | “We have to accept that in the changed circumstances of today, the renewable energy target is causing pretty significant price pressure in the system and we ought to be an affordable energy superpower … cheap energy ought to be one of our comparative advantages,” Tony Abbott said last year. |
| But according to sources, as the review process reached its conclusion and began providing briefings to the prime minister’s office, with the “paring back” option appearing to be the most likely, the prime minister’s office intervened to insist on a renewed emphasis for the policy of closing the RET to new entrants. | But according to sources, as the review process reached its conclusion and began providing briefings to the prime minister’s office, with the “paring back” option appearing to be the most likely, the prime minister’s office intervened to insist on a renewed emphasis for the policy of closing the RET to new entrants. |
| The prime ministerial intervention came as new research showed that coal and gas generators will reap $10bn in extra profits over the next 15 years if the government pares back the RET, and again confirmed that the nation’s electricity bills will not fall. | The prime ministerial intervention came as new research showed that coal and gas generators will reap $10bn in extra profits over the next 15 years if the government pares back the RET, and again confirmed that the nation’s electricity bills will not fall. |
| Coal and gas generators have been among the most vocal supporters of reducing the RET to a “real” 20%, but the research by engineering consultancy Jacobs – commissioned by the Climate Institute, the Australian Conservation Foundation and WWF Australia – found reducing the target would also be in those companies’ interest. | Coal and gas generators have been among the most vocal supporters of reducing the RET to a “real” 20%, but the research by engineering consultancy Jacobs – commissioned by the Climate Institute, the Australian Conservation Foundation and WWF Australia – found reducing the target would also be in those companies’ interest. |
| According to The Institute of Public Affairs, closing the RET to new entrants would mean that it achieved only 15,000 GWh of renewable energy, rather than the 41,000 GWh it is now required to deliver by 2020. | According to The Institute of Public Affairs, closing the RET to new entrants would mean that it achieved only 15,000 GWh of renewable energy, rather than the 41,000 GWh it is now required to deliver by 2020. |
| ACIL Allen modelling done for Abbott’s own review shows the current target will increase the average household bill by an average of $54 a year between now and 2020, but will reduce bills by a similar annual amount over the following decade compared with what they would be if the RET were repealed. That modelling used assumptions highly unfavourable to renewable energy, including that coal and gas prices would remain almost unchanged until 2040. | ACIL Allen modelling done for Abbott’s own review shows the current target will increase the average household bill by an average of $54 a year between now and 2020, but will reduce bills by a similar annual amount over the following decade compared with what they would be if the RET were repealed. That modelling used assumptions highly unfavourable to renewable energy, including that coal and gas prices would remain almost unchanged until 2040. |
| Separate modelling for the Clean Energy Council by Roam Consulting – with different assumptions about gas prices – found that bills would be $50 a year lower by 2020 if the RET were retained. | Separate modelling for the Clean Energy Council by Roam Consulting – with different assumptions about gas prices – found that bills would be $50 a year lower by 2020 if the RET were retained. |
| Another modelling exercise, commissioned by three business groups from Deloitte, found household bills would rise by at most about $50 a year. | Another modelling exercise, commissioned by three business groups from Deloitte, found household bills would rise by at most about $50 a year. |
| Opposition to the RET within the Coalition is driven by a potent mix of a deep hostility to wind turbines (as shown by treasurer Joe Hockey’s comment to the (anti-wind) Alan Jones that he found them “utterly offensive”) barely disguised climate scepticism (as evidenced by agriculture minister Barnaby Joyce, Ian Macdonald and Craig Kelly all suggesting that the fact the carbon tax repeal occurred on a cold winter’s day proved it had been unnecessary), and a belief that indefinite fossil fuel use is not a threat to the planet, but rather is crucial to human advancement. | Opposition to the RET within the Coalition is driven by a potent mix of a deep hostility to wind turbines (as shown by treasurer Joe Hockey’s comment to the (anti-wind) Alan Jones that he found them “utterly offensive”) barely disguised climate scepticism (as evidenced by agriculture minister Barnaby Joyce, Ian Macdonald and Craig Kelly all suggesting that the fact the carbon tax repeal occurred on a cold winter’s day proved it had been unnecessary), and a belief that indefinite fossil fuel use is not a threat to the planet, but rather is crucial to human advancement. |
| Abbott’s top business adviser, Maurice Newman, wants the RET scrapped altogether and has said that persisting with government subsidies for renewable energy represented a “crime against the people” because higher energy costs hit poorer households the hardest and there was no longer any logical reason for them. | Abbott’s top business adviser, Maurice Newman, wants the RET scrapped altogether and has said that persisting with government subsidies for renewable energy represented a “crime against the people” because higher energy costs hit poorer households the hardest and there was no longer any logical reason for them. |
| The Jacobs research also confirms several previous studies which found that winding back the RET would deliver financial gains, including $1.9bn for EnergyAustralia, which runs the Yallourn brown coal power stations in Victoria, $1.5nb for Origin, owner of the huge Eraring black coal power station in NSW and $1bn for AGL, which owns the brown coal Loy Yang A station in Victoria. AGL’s windfall would be much larger if it acquired Macquarie Generation. In that event AGL would gain by $2.7bn. | The Jacobs research also confirms several previous studies which found that winding back the RET would deliver financial gains, including $1.9bn for EnergyAustralia, which runs the Yallourn brown coal power stations in Victoria, $1.5nb for Origin, owner of the huge Eraring black coal power station in NSW and $1bn for AGL, which owns the brown coal Loy Yang A station in Victoria. AGL’s windfall would be much larger if it acquired Macquarie Generation. In that event AGL would gain by $2.7bn. |