Renewable energy target about to get an Abbott-style haircut

Oh, dear, this is going to get ugly. Very ugly. Australia is poised to become the first country in the world to reduce the ambition of its renewable energy target – either through a deal between the Coalition and other parties. Or by default.

Only in Australia, one imagines, can a proposal by the government to slash the country’s renewable energy target by more than half be proclaimed by the “experts” as a “victory” for the moderates. Such is the toxic nature of this government’s antipathy to all things clean and green, and wind farms in particular. Welcome to Team Australia. Open to vested interests.

Devastation for the renewable energy industry appears to be the only outcome for the political manoeuverings going on in Canberra. As if this was not evident enough, Keppel Prince – the largest manufacturer of wind towers in the country – mothballed its business and sacked 100 staff on Thursday.

canberra_lake_george_wind

It’s a decision that reflects the grim reality – there will be precious few, if any, new wind farms built in Australia in coming years. The Coalition government and its anti-wind element simply won’t allow it. And it is the simple mechanics of what is happening now in the federal policy area.

The Coalition knows through its policy of obfuscation that even with a “something is better than nothing” approach, the industry will wither on the vine. The only way to encourage investment is for the Coalition to agree to a robust target – something it has no intention of doing. Even a compromise deal – something rather than nothing – is unlikely before 2015, because there are only two weeks left for the parliament to sit.

The Abbott government came to power with an unstated platform to kill the large-scale renewable energy industry in Australia, and it is largely succeeding.

The wind industry – and the large-scale solar industry for that matter – is getting desperate. Investment has come to a standstill, some international players have left, others are on the verge of doing so, and the local players are on the verge of financial ruin.

The trouble is, even a little “something” (in the form of a compromise deal of around 31,000GWh) could be disastrous for the industry. It would push back many projects by years, cause many remaining international developers to leave Australia, and put existing investments in peril because of the fall in the price of certificates.

Only a few wind farms – such as those contracted by the ACT government from its own 90 per cent renewable energy target – and some smaller-scale solar farms will get built. The rest of the industry will remain at a standstill.

This, of course, would suit the Coalition. Their policy is driven by a host of factors, not least their hatred of wind farms, their refusal to accept the climate science, and their commitment to the interests of energy and industry incumbents.

Little wonder that Australia’s reputation as a safe investment destination is being trashed. It has fallen from 4th to 10th on an index of investment attractiveness, has fallen to last on another survey on climate and clean energy policies, and ranks below poor Caribbean and African countries in terms of investment.

Even Jeff Immelt, the head of General Electric, the largest supplier of machinery to energy systems in the world, and a supporter of the current RET, lamented today that when he switched on the TV this morning, he was confronted by two politicians arguing over renewables.

But the hypocrisy of this government knows no bounds. This was Greg Hunt, environment minister, speaking on radio this morning, about LNG exports.

“Look, there are contracts that are being struck. They were mostly done under the previous government I’ve got to say, for the export of gas. So you can’t break (a) contract and nor should, you know, I think a Government of any persuasion would contemplate, let alone a Coalition Government.”

Yet that is exactly what the government is proposing for the RET. It signed on for a 41,000GWh target in 2010, even after being told quite clearly that it would result in more than 20 per cent share or production. It criticised the then Labor government for delays in implementing the target – Hunt himself said the uncertainty was bad for the industry.

The ineptitude of the Coalition is highlighted by two other comments made today:

One was by Greg Hunt, who is claiming that electricity prices fell by up to 10 per cent as a result of the removal of the carbon price (another first for Australia). Yet official data shows that electricity prices fell by only 5.1 per cent, and even those falls will soon be gobbled up by rising network and soaring gas prices. In any case, bigger discounts are on offer by all major retailers, and a few smaller ones too.

The other was made by Dan Tehan, the local member for Wannon, the electorate where Keppel Prince is located, who told The Guardian,  that “the government is seeking to provide certainty on the RET … this demonstrates the need to get a sensible bipartisan outcome.”

No, it demonstrates the need to keep the target as it is, and for the Coalition to sign up for that commitment. Tehan led a group of 25 “moderates” who called for a “real” 20 per cent target earlier this year – a petition that his colleagues were too afraid to sign publicly.

Yet the closure of Keppel Prince’s wind manufacturing operations is exactly the result predicted by slashing the target to a real 20 per cent.  This, dear member, is a direct result of your policy settings. And it highlights the perversity of Coalition policy: less manufacturing means less electricity demand, ergo we should cut renewable energy target. Result? More manufacturers out of business. As the French say, plus con, tu meurt. Any dumber, you’d be dead.

Now, the negotiations are in the hands of Ian Macfarlane, the man who in the same position a decade ago, killed the then MRET, also when modeling commissioned by the government showed it to be beneficial for industry, jobs, investment and electricity prices.

But this is not a government that functions on facts. The Labor Party can either hold firm on 41,000GWh or negotiate a compromise in the mid 30s. Either way, the wind energy industry in Australia is effectively stuffed.

Comments

20 responses to “Renewable energy target about to get an Abbott-style haircut”

  1. Keith Avatar
    Keith

    Labor has to stay with 41GW even though it means that the funding drought remains. If they cave in to say 30GW, the LNP will then start to water that down. The LNP has no capacity for being truthful or honouring commitments.

    By staying at 41GW, the pressure will remain on the LNP. It is building, so let them sweat.

    1. riley222 Avatar
      riley222

      Agree Time for Labor to take a stand. Of course if PUP doesnt stand firm then it will be for nothing. Watch the Abbott crew work on PUP.Despicable bunch of hypocrites Abbotts government.

  2. Farmer Dave Avatar
    Farmer Dave

    A very sad story, and you have called it for what it is, Giles.

    Who are these people? (The government, I mean). What do they know? How many of them have even passed high school physics? How many have physics degrees? How many have studied atmospheric physics? How do they dare think they know more than virtually all of the world’s peak science bodies? How do they dare think they know more that the thousands of scientists whose work underpins the vast mass of evidence that has forced all those scientists to actually agree on the big picture story of human induced climate change? (Believe me, trying to get a group of scientists to agree on anything is like trying to herd cats – unless the evidence is overwhelming.)

    These ignorant fools – our government – are being criminally irresponsible with the future of our planet. I weep for the world I will leave to my two beautiful sons.

    1. Ken Dyer Avatar
      Ken Dyer

      Farmer Dave, these people are not ignorant, they are merely corrupt.

    2. shaunmaris Avatar
      shaunmaris

      Is the Australian government doing enough to combat climate change?

      See how the public feels and post your view.

      http://www.pollytopic.com/index.php/politics/item/21-is-the-australian-government-doing-enough-to-combat-climate-change

    3. johnnewton Avatar
      johnnewton

      Farmer, even worse, Hunt is well educated and di a Master’s, I believe (correct me if I’m wrong) his thesis on…climate change.

      1. Alen T Avatar
        Alen T

        You have to be kidding me, a master’s thesis on CC and yet he has approved THE project that will guarantee blowing the 2 degree global warming target the international community has agreed on. Unbelievable…

        1. Miles Harding Avatar
          Miles Harding

          Truly unbelievable!

          Then there’s MP Dennis Jensen, who has a PhD in materials science from Monash. You’d think that this sort of PhD and experience working at the CSIRO would equip a person to make an objective assessment of the issues around climate change, but apparently you’d be wrong in this assumption.

          Sadly, I am tending to agree with Giles, this is a campaign of attrition and a victory for dogma over reason with the true loser being the future of civilisation.

      2. RobS Avatar
        RobS

        Not quite, his thesis was on the inherent efficiency of market based mechanisms (emissions trading schemes) for tackling industrial pollution

  3. Chris Fraser Avatar
    Chris Fraser

    There are retailers and consumers who are responsible for driving the investment of renewable by surrendering RECS. What we also need is for incumbent generators to swap 20% of their existing dirty generation for clean and this amount raised as a proportion of the total, subject to the occasional report by the CCA. Although it does sound a bit direct action.

  4. Richard Hayes Avatar
    Richard Hayes

    I am flying to India on Monday to (hopefully) sign a contract for a 50MW solar plant in Kannada (Bangalore). We are also working on over 600 MW worth of solar projects in West Africa with funding already in place.

    This morning through one of NSW state departments we are requesting another USD Billion in funding out of China for projects in India, Africa and South America. The money is available but whether we get it or not is a different question.

    There is plenty of capital and projects if you work on a global scale but nothing for Australia.

  5. Heliotrope Avatar
    Heliotrope

    Can someone explain, Why does the Labor Party feel it needs to negotiate? Does the government have the numbers in the Senate to make these changes?

    1. Giles Avatar

      No, the government does not have the numbers, unless it can convince PUP. But until there is certainty, there will be no investment, that’s why there has been none in last 2 years, despite the 41,000GWH legislation being in place.

    2. RobS Avatar
      RobS

      I think they feel they need to negotiate because some compromise be it 28 or 35 or any other number will at least save some of the silverware and prevent wholesale destruction of the entire industry which can then be rebuilt when this lying mob is turfed out. The coalition does not need a majority, they can effectively destroy the industry by simply allowing this process to remain deadlocked and allow the industry to die by attrition.

  6. John Silvester Avatar
    John Silvester

    The ALP should maintain its commitment to the current RET until the release of the legislated RET review. The PM’s Office RET review recommendations have been completely discredited leaving no credible basis to argue for change.

    If the independent review does recommend changes those should be considered by the government and opposition parties. I would think that the new review is unlikely to recommend any major changes to the RET and certainly none that would drive a sword through the industry.

  7. Rob G Avatar
    Rob G

    For too many reasons to name here, the Abbott government must be removed. What they are doing is economic vandalism of the highest order. Wilfully destroying the biggest growth industry of the decade. When they are finally ousted, the industry will be cautious about returning to our shores, history hurts and there will be a knock on effect.
    When progressive control returns it will need to be clear and simple when re-installed support. The RET target should be doubled and locked down for many years. This is after all our pathway to a clean energy future. Australia needs to then sign aggressive CO2 reduction commitments, so that we stitch ourselves in, no matter what dubious ideology comes to power. A lesson learnt from the current goons in power.

    When fighting to return to power, Labor must make it clear what the Abbott government has done to the renewable industry. This is a very important point of difference between the parties and it cannot slip by the voters unnoticed.

    Meanwhile, Labor must remain committed as they appear to be, they have the numbers to halt Abbott’s stupidity. Labor must bring the stalemate to an end without compromise.

  8. Alen T Avatar
    Alen T

    Any indication on how the Wannon electorate has or plans to react after its own representative failed to protect and stand up for his constituents, and worse played an important role in creating more of an anti-renewables sentiment.

  9. Michel Syna Rahme Avatar
    Michel Syna Rahme

    Time for Christine Milne to resign as leader – there must be accountability!

  10. johnnewton Avatar
    johnnewton

    Thanks for the correction Rob S. Even worse!

  11. Les Johnston Avatar
    Les Johnston

    Good coverage of the Age of Fossils in Australia.

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