Labor picks a winner with 50% renewable energy target

Print Friendly

It seems that the Labor Party has finally had enough of joining with the Coalition in the policies of the lowest common denominator, at least in respect to renewable energy. Labor leader Bill Shorten has finally found a major issue to make a point of difference with Tony Abbott.

The announcement by Shorten that he would ask Labor to adopt a 50 per cent renewable energy target – following a major push among grass-root branches – is a real breakthrough for the political debate in Australia, possibly as significant as the bipartisan deal to pursue a 20/20 renewable energy target way back in 2007.

That 2007 deal led to the rebirth of the Australian renewable energy industry and billions of dollars of investment, that only came to a crashing halt when the Abbott Coalition government came to power in 2013. It wallows in uncertainty since Abbott himself declared that he doesn’t even like wind energy.

The past two years, when Labor was forced by the Coalition’s incumbency to come to the table and negotiate a reduced renewable energy target, has seen an investment drought that has tainted Labor nearly as much as it has the Coalition. Finally, it is looking to gain clean air on this critical issue.

Shorten confirmed the target on Wednesday, saying that Labor wanted to see more solar panels on the roof-tops of Australian homes and businesses, and it wanted to see battery technology “developed to the point that electricity from solar panels can be stored in our homes and small businesses.”

He continued: “We want to make sure that investors in windfarms can be confident about investing in wind power. There is an absolutely clear cut choice between Labor and the Liberals when it comes to renewable energy.”

A 50 per cent renewable energy target by 2030 serves four good purposes.

Firstly, as Shorten points out, it creates a clear difference between Labor and the Coalition government, and may help Labor recapture some of the middle ground (yes, middle ground) lost to the Greens in the past two years. In turn, it pushes the Coalition to further extremes.

If the Coalition really were to take climate change as seriously as they say they do, they will have no choice – at some stage – but to backflip on the climate policy, and reverse their attempt to kill the renewable energy industry. Or they could push for nuclear, which would be so unpopular and so ridiculously expensive it would be political suicide.

Not that they are ready to admit that. Environment minister Greg hunt’s initial response – “this will push up electricity prices for families and pensioners” – suggests that their rhetoric and political engagement will remain in the basement for the time being.

The Greens, by the way, have a 90 per cent renewable energy target by 2030. The ability to meet that target might be questioned by many, but energy spokesman Larissa Waters makes the valid point that – considering Australia was headed towards 30 per renewables by 2020 under the previous policy – a 50 per cent target by 2030 does not exactly reflect an acceleration from where we were before.

Indeed, Tasmania is already at 100 per cent renewables, ACT has a 90 per cent target by 2020, South Australia has a 50 per cent target by 2025, but will get there much earlier, and Queensland has a 50 per cent target by 2030.

The second strength of the Labor position is that it provides a positive element to the suite of climate policies. Carbon pricing is toxic, at least on talk-back radio and in the Murdoch press, but as the poll results revealed below illustrate, renewable energy is popular.

Somehow, the renewable energy industry was ignored in the last two elections, despite the fact that more than two million homes have solar PV or solar hot water, and even incumbent utilities concede that a revolution in the way we produce and use energy is upon us. Within a few decades, half of all electricity needs will be produced and stored by consumers – households and business. Labor has finally realised that renewable energy is a powerful and positive issue in the electorate.

Thirdly, a longer-term target gives confidence to the renewable energy industry. Right now, the industry is facing a policy suite that finishes at 2020, and goes no further. As we wrote last week, this would not only bring investment in large-scale renewables (with the exception of large behind-the-meter rooftop solar arrays ) to a halt once the 2020 target is met, it is creating uncertainty and investment risk for projects that are being contemplated now.

If Labor did get into power, the industry could move forward with certainty. That would create added competition for projects, and it would lower the cost of finance. The ACT government has shown exactly how a liberal dose of policy certainty can benefit consumers and get things done.

Fourthly, it provides a solid signal to the coal industry that the transition is happening. Bloomberg New Energy Finance provided data last week that showed that, if nothing else occurred, Australia’s energy mix would change little from 2020 to 2030, and few coal-fired generators would close.

The Labor target would provide the policy signal to the ageing fleet of inefficient and highly carbon intensive coal-fired generators that they should exit the market.

Polling confirms the popularity of the move. A public opinion poll commissioned by Future Super and conducted by Lonergan Research finds that 73 per cent of Australians support lifting the renewable energy target to 50 per cent or higher.

The poll also found that 94 per cent of the 1053 surveyed thought that the renewable energy target should be higher than it currently is (it was recently slashed from 41,000GWh to 33,000GWh) and 15 per cent actually thought that the target should be 100 per cent renewables. The support for 100 per cent renewables increases to 20 per cent in regional areas (memo LNP).

renewables poll

The Lonergan poll also found that Australians have a generally negative view of the government’s approach to climate change (with just 21 per cent supporting the government’s position), and 80 per cent of Australians were now concerned about the issue of climate change.

Future Super managing director Simon Sheik said: “Lifting the renewable energy target is a no brainer. It is a policy supported by a large majority of the Australian population.”

This suggests that the mainstream debate over the renewable energy target could be framed between the positions of Labor and the Greens, with the Coalition as the outlier.

Australian homes and businesses are poised to add four or five times as much solar as exists now, as well as battery storage. The emphasis should be on ambition, and the scale of that ambition, and how the transition is managed, and not slowed by artificial barriers such as tariff changes.

The Future Super poll also revealed that the community is reacting to the issue of fossil fuels in Australia, the development of fossil fuel resources, and the issue of divestment.

The poll found that Australians see investing in coal as risky, with half associating the risk of coal investments as high. Forty-one per cent want banks and superannuation funds to stop investing in coal.

This sentiment is strongest among young Australians (18-24 years old) where more than half (56 per cent) have indicated they to want to see banks and superannuation fund companies stop investing into coal.

Chris Lonergan, the head of Lonergan Research, said: The climate issue has never been more important. Australians are moving away from traditional energy sources such as coal, and looking towards a future reliant on a renewable energy industry.” And so are the majority of political parties, if not the majority of MPs.


RenewEconomy Free Daily Newsletter

Share this:

  • Rob G

    By all accounts the Abbott government’s open climate denial position and lack lustre renewable transition is helping the Labor vote. This is something that Labor are doing well, and something that will emphasise the difference between the major two parties. I suspect that if the Greens get strong numbers in the next election that Labor may be forced to be even more ambitious when back in power. As for the Liberals, they will learn that Australians are pro renewables, but until then, they will carry on their ignorant way.

  • Barri Mundee

    Finally Labor may have found some backbone! They need smart policy that is popular too among voters. Not sure whether an ETS will still be policy but a reasonably ambitious RET could achieve significant progress towards reducing the role of FF whilst avoiding the negatives associated with a price on carbon.

    This will be one if the few issues that is a point of difference between the major parties and it should not be difficult to counter the attack already launched by Greg Hunt. After all, the COALition RET review by Maurice Newman has found that the RET will not in the long term raise prices but will more likely reduce them.

  • Reality Bites

    Brave or foolhardy. Sure make the election about carbon and renewables, that will definitely generate support in the current economic climate. Seemed to work well for previous Labor governments. Who was it that said it’s the economy, stupid.

    • Barri Mundee

      It’s a much smarter approach than the problems in pricing carbon. It could even be argued it’s a variant of direct action.

      • JIm

        Wrong wrong wrong!!! – DA is an Abbott euphemism for we pay the polluters! A subsidy every respectable economist rightly deplores. Shorten’s idea is altogether different and better.

        • Barri Mundee

          Settle there Jim. I agree that Abbott’s DA is paying the polluters and I didn’t not agree with that at all and I doubt if it will be more than marginally effective.

          I was merely trying to point out, clumsily no doubt, that a RET is a FORM of DA, just like Obama’s aim to regulate lower emissions in the US.

          • JIm

            Direct action is you or I planting a tree or turning the light off or installing PV my view. Policies indirectly shape this behaviour.

      • Owen Griffiths

        I don’t think there’s any argument – the RET is absolutely Direct Action. There is not much more direct than mandating X GWHr’s of wind power much be generated.

    • Martin

      By the time the election comes around the scientific debate will have moved so far beyond any climate change denial-ism that the Labor party will simply be able to wedge the Liberals on being unscientific, against science, against reality. The timing is right for them with the climate talks in Paris coming up and the scientific community speaking more directly with ever growing concern. I’ll still be voting green anyway but great to make the next election framed around this issue of our time.

  • Rob Campbell

    Historically, I have always been one to support the conservatives based solely on fiscal responsibility, State and Federal Labor have left the country with absolutely huge lingering debts, with little means of paying them off. The Lib’s however are just as guilty for setting the states up for a fall by over selling the GST and robbing the states of income during the Howard years forcing them to borrow. I personally make more money out of construction, and lately renewables under Labor governments but morally have continued to dismiss Labor as economic vandals. But as I sit and look at the narrow minded, arrogant and frankly dishonest actions of the Abbott government I am now inclined to vote Labor, not for my own selfish reasons, but because the the moral case against Labor just doesn’t seem any worse than the Libs. Sack ‘Em all I say and bring in a Chinese style one party system. Their biggest problem is corruption which is smaller yet more despised than the corruption that US citizens accept as a cost of democracy – a load of crap.Our silly system sees hostage takers residing in the house of review and lower house reps who only care about saving there arses for three years and can look no further.

    Perhaps we need to go back to the ’70’s, maybe “It’s Time”

    • Barri Mundee

      Could I direct you to a different perspective on the “debt and deficit mantra”?

      It is a US site but there are local sites which espouse much the same challenge to the prevailing paradigm.

    • nakedChimp

      saturated capitalistic economies with monopoly money always have to end with the lender of last resort being the one holding the biggest debt.. just look all over the world and you can see the pattern, it’s not coincidence – it’s systematic.
      The system works that way, no matter what politician you put at the helm.
      And if the lender of last resort doesn’t play ball – read: takes up debt nobody else is able to take – then the journey to Jerusalem game is just over sooner, not later.

      • neroden

        Yeah, it’s kind of important economically to understand how money works. The government prints the stuff, and they need to print enough and keep enough in circulation to keep commerce going — but not too much, as that leads to inflation.

        For some reason, most of this printed money is recorded as “government debt”, which it shouldn’t be. But anyway, in order to have economic growth, you have to keep printing money to keep up with the economic growth.

    • Nigel Colhoun
    • neroden

      At some point, your Liberal/National parties got taken over by US-style, Reagan-style right-wingers — who are dishonest, arrogant, and who borrow-and-spend for wasteful crony projects.

      I remember when you used to have sensible conservatives. That ended with Howard.

      You’ve followed the same pattern as the US: we had Reagan, the UK had Thatcher, you had Howard; then we had G W Bush, Canada had Harper, you had Abbott. Awful all of them.

      The days of competent conservatives seem long gone.

      • Rob Campbell

        Yes I must say I tend to agree, where’s Don Chip when we need him.

  • lin

    Excellent news!. If we can get the coal and oil subsidies removed as well, we should start to see rapid progress!!

    • Reality Bites

      What coal and oil subsidies? They are a myth propagated by the anti coal campaigners.

      • Thylacine
      • lin

        Those “anti-coal campaigners” known as the IEA indicate that fossil-fuel consumption subsidies worldwide amounted to $548 billion in 2013.

        • And those whacky lefties from the international monetary fund reckon that if you include environmental effects, the subsidies amount to $5 trillion a year. Trillion.

          • john

            The problem is Giles not many read that especially not the majority who get their information from disinformation outlets; “read” as in any paper or cheap on air TV let alone pay for view junk.

          • Reality Bites

            So if you look up the IEA site it says “Invalid data for Australia”. The FTC is not a valid subsidy, the mines actually pay the money then get a credit, as do farmers and any fixed user of diesel for generation or other industrial purposes not requiring use of the roads. What is more the graph by Sophie Vorrath on 29APR15 indicates that of the 5 largest coal miners, who produce around 50% of all coal in Australia the FTC is only $366m.(
            The IMF figures are rubbery and they state in the report that “These findings must be viewed with caution. Most important, there are many uncertainties and controversies involved in measuring environmental damages in different countries.” Yes they are based on the estimated future health and environmental damage. A bit like saying that the bottle of red you cracked last night was subsidised by over 100% due to the health and other damages caused to society by alcohol. As I said before, this is all propaganda based on half truths and selectively propagated. Having said that, yes I do agree with sensible policies for a staged withdrawal from coal, however stop the hyperbole and disinformation.

          • Reality Bites

            I should also add that, despite the fact many in Labor are already backpedalling on this policy on the run, economics 101 would say that if you continue to add supply to the market, the price will come to a point where supply is discouraged and eventually you then head to an equilibrium in supply and demand. If by some chance Labor were to actually get in and implement this policy with a mandated RET, the give will be coal (yes I hear cheering in the background) which will mean that at some point between probably 2017 and 2030 the NEM will alter substantially and the cheaper coal will be replaced by more expensive renewables. If you think solar is cheap, then why is ACT paying $176MWh, locked in for 20 years? In the future that rubbery IMF fossil fuel subsidy figure of $5trillion will probably seem like chicken feed to the renewable subsidies, if calculated on a similar basis i.e. taking in the direct and indirect costs including loss of productivity.

      • Barri Mundee

        Tax breaks, accelerated depreciation etc. May be not be called “subsidies” but they amount to one big economic advantage that is now looking increasingly hard to justify.

  • Cooma Doug

    What will happen when the mix is 50% renewables is not seen at all by the polliticians and many industry experts as yet. The fact is, technologies that are changing rapidly will by then have effectively moved the wholesale electricity market into the home. There will still be the grid but the load it supports will not be volitile and the energy production will be flat all day. The things that make large base load power appear to be a good thing today will disappear. Coal, nuclear and large base load fossil fuel generators will look really awful in this environment, from a climate, ecological and ecconomic point of view. They already do in many parts of the world.
    So by the time we get to the 50% level in this island nation, the system will be such that the last fossils will vanish quickly from that point.

    • Reality Bites

      Maybe but the proposal time frame is less than 15 years away. Given that it takes 3 to 4 years to get a project off the ground, Labor will be hanging their hat on technology being available to make this a reality. This is sort of the reverse of the NBN where Labor decided to go ahead with the great big internet project that already is looking like it might be overtaken by new technology. I agree that a plan is a good idea but it has to be realistic. This plan also needs to take into consideration the structural impact on the existing position. Posters in here don’t really care that this will destroy existing utilities, which will mean billions of dollars of lost capital to State entities. Of course the money tree option is still growing nicely.

  • Peter Campbell

    I think sometimes things need to be presented three times. It was like
    that with a small local matter I was involved with. First time – barely
    majority support and massive backlash when we thought the majority vote
    had been enough. Second time – increased support in spite of major anti
    campaign but still not quite the 2/3 support that may or may not have
    strictly been required. Third time – muted opposition and went through
    with 85% support.
    Much like the GST. First time – Keating is rolled in cabinet, Second time – substantial support but massive opposition and Hewson does not get in, Third time – more muted opposition and less public concern and Howard gets it up.
    Perhaps, third time around people will mostly yawn about a carbon tax scare campaign?

    • Reality Bites

      In the current economic environment the hip pocket always hurts. Relatively high unemployment, lack of confidence, uncertain international markets, go ahead Shorten, make Abbott”s day!

      • Barri Mundee

        The relatively high unemployment (and will go higher) is mostly to be sheeted home to the Abbott government (worst government ever) as they have by their cuts driven the economy down and we will likely have a recession.

  • Rob

    Thank goodness. The Great Energy Transition is a comin’ so move yer bloomin arse Australia or you’ll be left behind in the dust ( coal dust that is ).

  • John Bromhead

    “it creates a clear difference between Labor and the Coalition government, and may help Labor recapture some of the middle ground (yes, middle ground) lost to the Greens in the past two years. In turn, it pushes the Coalition to further extremes”

    So what makes this one of the 4 good things? Policy for political expediency.

  • john

    With out a doubt the short term goal of the Government will be to use the very effective “Great big Tax” cry.
    It will work because trying to explain to people who only understand 3 letter long nouns will be all confused and flock to simple stuff.
    I have no faith that the idea will fly because of the basic stupidity of Australians.

    • Chokyi Nyingpo

      John, not if it is sold simply and correctly. The “conversation” Labor needs is to move beyond the divisive 3-word-slogans Abbott has always defaulted to.

      For too long Australian’s have been inward looking, myopic and selfish; more than a decade, says Jeff Kennett today, though i would argue since the mid 90’s.

      If, and it’s a big if, the Labor leadership can start to espouse a simpler renewable/climate change vision that the Lib/Nats don’t and can’t have, then this policy will create winners all round and they will have won the ‘middle ground’ in spades.

      Trouble is, this policy is just one piece of a far bigger picture yet to be made clear by them as their opponents are devoid of vision. I only hope they have a couple of others to piggy-back off this.

  • Rob G

    One does get the feeling that the coalition don’t see this threat coming. And are confident (and arrogant) that they are doing a good job, should ever the question arise.
    The problem for the LNP is at some point they will realise that their stance is untenable and that they need to get onboard to remain an electable option. They will be starting from a position with no credibility with the voters – it could set them back for years to come.

  • Karin Peagam