RET-go-round 20

Media speculation in March that the row over the federal renewable energy target would be resolved by Easter have proved to be well wide of the mark. Just when the political wrangling will stop is an open question.

In a nutshell, the government proposes 23 per cent of renewable energy in the national electricity production mix by 2020 made up of 15,000 GWh of mainly hydro-power, 32,000 GWh under the large-scale RET and about 14,000 GWh of output from rooftop solar PV installations.

This, say Industry Minister Ian Macfarlane and Environment Minister Greg Hunt, will “recalibrate” policy to reflect the market changes that have occurred since the present RET was legislated six years ago, including over-supply in the east coast generation market.

The changes would come with an exemption from the measure for emissions-intensive, trade-exposed manufacturers.

The Labor alternative calls publicly for the large-scale target to be “in the mid-to-high 30,000 GWh” range but is reported to be  33,500 GWh.

Various players among stakeholders are now calling for a settlement of 33,000 GWh.

(In passing, when the measure was in its heyday in 2011, official government modelling foresaw a 2020 situation where zero-emission electricity would deliver 63,000 GWh across the country by 2020, with 13,000 GWh coming from conventional hydro-power, 37,000 GWh from wind farms and 5,000 GWh from geothermal energy, an interesting indicator of the perils of projections.)

Neither mainstream political side today wants to impose restrictions on small-scale solar PVs because of the political downside of offending more than a million households with rooftop arrays plus those considering augmenting their supply with such a system.

Needless to say, the Greens remain obdurate: the RET should remain at 41,000 GWh and be lifted to higher levels as soon as possible; anything different is caving in to the fossil fuel sector. So there.  In New South Wales, the party, which picked up 10 per cent of the vote in the 28 March election, continues to demand a commitment to 100 per cent power generation from renewables and the closure of all the State’s coal-fired plants by 2030.

The other extreme of this debate, I guess, is represented by independent senator David Leyonhjelm, arguably the “driest” MP in federal parliament, who labels the RET “a dog of a policy,” complaining that green generators have received $9 billion in subsidies over its 15-year life and stand to obtain a further $22 billion by 2030 if it stays at its legislated level.

The Australian Industry Group is urging the mainstream parties to “get off the fence” and to do a deal, arguing that a new arrangement will provide energy investors “with at least some certainty” to pursue new developments.

Somewhat lost to view in the melee is the fact that an agreement around the 33,000 GWh mark will require about $10 billion to be spent on forcing more wind farms in to the severely over-supplied east coast market. If this investment is not forthcoming, Leyonhjelm warns, consumer prices will “skyrocket” when the RET’s penalty price comes in to play.

The senator’s solution is to leave the RET at 41,000 GWh but to allow all the hydro-electric generation output to qualify as part of the measure. He also supports no cap on small-scale solar generation, the status quo in other words. Under his changes, the hydro businesses would be required to commit to upgrading their present assets, leading, he says, to an extra 3,000 GWh of production.

The losers, Leyonhjelm says cheerfully, will be wind farm entrepreneurs, who will find little additional room on the “gravy train.”

In passing again, various green fellow travellers, including writers for Fairfax Media, persist in calling wind farming “Australia’s large-scale renewable energy industry” when, in fact, hydro output is more than double wind-based production and the other substantial grid-connected performer, bio-energy, mostly using sugar cane waste and landfill gas, has been around a long time, too. Hydro and bio-energy between them contribute 62 per cent of annual zero-emissions power production — which, in turn, makes up 15 per cent of national electricity supply.

Coming back to the chase, just when the Labor Party will come to a decision on its RET position has to be judged against the shenanigans behind the scenes with respect to the party’s national conference (in Melbourne on 24-26 July).

Apart from chief negotiator Mark Butler being pre-occupied in chasing the role of next ALP national president, the strongly left wing Labor Environment Action Network (yup, that’s LEAN) is demanding a platform commitment for 50 per cent renewable electricity by 2030.  The politics may be hard, say LEAN, but “we must take a conviction-based approach.”

The mining and energy trade unionists have described LEAN as “politically naive,” arguing that a 50 per cent target will “increase the cost of electricity for manufacturing and households while being a poor tool for reducing Australia’s carbon emissions.”

Meanwhile, you may be interested to learn that the newly-released NSW government review of the State’s energy efficiency promotion activities has found that they delivered almost 8,000 GWh in electricity savings between 2009 and 2013 in residential, commercial and industrial sector (with the biggest gains by far being commercial) — and that this was worth $1.2 billion in accumulated bill cuts for consumers.

Not surprisingly, the report finds that maintaing the so-called ESS (Energy Savings Scheme) beyond its present 2020 deadline will bring still more benefits.

You noticed the media springing on this story, didn’t you?  No, of course not, because they didn’t — while the coverage of the RET saga continues to get thousands of words. There also wasn’t coverage last year of the fact that the Baird government expects to reduce its own $500 million annual bill for energy, water and waste by $55 million  by 2025.

Just more reinforcement for that cynical, old newshound saying that “if it bleeds, it leads.”

 

 

 

 

 

 

 

 

 

 

 

 

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