Kane Thornton, deputy CEO, Clean Energy Council
Australia’s 20 per cent Renewable Energy Target has already delivered thousands of jobs and billions of dollars of investment, and is capable of much more if the federal government can resist tinkering with it. It’s a classic case of it ain’t broke, so let’s not fix it.
The Renewable Energy Target (RET) is designed to deliver 20 per cent of Australia’s electricity from sources such as sun, wind, waves, bioenergy and others by the year 2020. Introduced by the Howard government in 2001, the policy was expanded by the Rudd government in 2009 and is just now starting to hit its stride.
Business often talks about moving goalposts, but changing the way the scheme works now really would be like the AFL or the NRL changing the rules of the game halfway through the premiership season.
It would mean that all the pre-season training, all the effort to recruit the best players and all the hours spent on strategy were irrelevant.
However, the effect of making major changes to the RET wouldn’t be just to lose a few matches – it would be measured in the hundreds of millions of dollars in investment and the thousands of jobs that would be lost.
Ultimately it would be like a season where there was no winner – only losers.
All over the world, interest in the renewable-energy sector is at a record high, with US$257 billion being pumped into it last year across the globe.
Over the last decade, investors in Australia have chipped in around $18.5 billion in investment, with more than $3.5 billion in projects currently under construction. Large clean-energy projects currently supply enough clean energy for the equivalent of 2.1 million households – around 10 per cent of our electricity. A further 1.5 million homes have solar panels or solar hot water. And there’s potentially much more to come.
But right now, investors are for the most part watching cautiously from the sidelines as the federal government’s Climate Change Authority reviews the RET.
Vested interests that want to see the target changed or removed have been making a big deal about its costs. But those costs make up only a small percentage of the average power bill – seven per cent versus the 40 per cent contributed by upgrading poles and wires.
What’s more, the costs of meeting the target are going down as renewable energy falls in price and government incentives to buy solar power are wound back.
At the moment you’re looking at less than $2 per week going towards renewable energy. In 2020 it will be about half that, provided the current RET remains. That’s a small price for tens of thousands of jobs, billion dollars of investments and to protect us from the future impact of rising gas prices.
While speculation about the future of the carbon price remains, the RET has been one of the few investment-grade policies that Australia’s electricity generators have been able to rely on.
This is largely because it is supported by all sides of politics.
Polling consistently shows that around 90 per cent of Australians support more clean energy, and our politicians have acted to give them what they want.
The renewable-energy industry has repeatedly outperformed expectations, forecasts and previous targets. If the government can resist the urge to intervene in the Renewable Energy Target, clean-energy companies and investors can start to get on with the business of kicking some serious goals for Australia.