Senate passes RET bill, cut to wind farms becomes law

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Australia on Tuesday became the first developed country to cut its renewable energy target – adding to its honour of being the first to dismantle a carbon price – when the Senate passed legislation reducing the large scale target from 41,000GWh to 33,000GWh by 2020.


The new bill will cut new investment in renewables by around $5 billion, just as the world accelerates its investment in wind farms, with more than $US3.7 trillion to be spent on solar alone in the next two decades, and $US8 trillion overall, according to a new report by Bloomberg New Energy Finance.

The legislation, which also allows native wood waste to be burned and included in the target, and introduces a “wind commissioner” to deal with complaints from nearby residents, will likely cause a huge scramble as projects stalled in the investment drought over the past two years seek off-take agreements and financing.

While both the government and the Opposition – and some industry groups – hailed the passage of the bill as providing “certainty” – it is only a thin veneer.

Labor environment spokesman Mark Butler baited the government saying that it was “bad news for Tony Abbott” because it meant “those wind farms he finds so utterly offensive can start being built again, despite his best efforts to drive them from our shores.”

The reality is that while the Coalition government has pledge no further review until 2020, it is just one vote short in the Senate from doing what it likes. With an election possible soon, and Labor struggling in the polls, that certainty may be short-lived.  Abbott has made clear he would stop new wind farms if he could.

Hence the sense of urgency among wind farm developers to get their projects through. Wind farms also face competition from large-scale solar projects.

Analysts such as BNEF suggest that more than one third of the RET may be allocated to big solar as its costs come down. Indeed, in a new report it predicts large scale solar capacity will outstrip that of wind by 2040.

But the Coalition government is keen to ensure that as much solar is built, and has pledged to boost the prospects of the technology by  directing funds from the Clean Energy Finance Corp (an institution it wants to dismantle) and other measures detailed in this story.

The Coalition is pitching this as a victory for renewables, saying the industry would double and contribute 23.5 per cent of Australia’s generation by 2020. Labor is saying it will be closer to 25 per cent. Neither party has explained what justifies the reduction, apart from the need for “certainty”.

But the impact on large-scale investment is significant: instead of 8,500MW of capacity being built over the next five years, only around 5,500MW will be built.  This will relieve some pressure on the earnings of fossil fuel generators, who pushed for these and even greater cuts.

Kane Thornton, head of the Clean Energy Council, said between 30 and 50 major renewable energy projects and hundreds of medium-sized projects would be built over the next five years.

“While this has been a challenging process, and we are disappointed by the level of reduction of the target for large-scale renewable energy, the passage of this legislation provides the platform for a doubling of renewables over the next five years,” Thornton said.

The Greens said the proposed wind regulations – which come despite no medical evidence of health impacts – would seek to seek to strangle the industry with red tape, while no controls were imposed on coal-fired generation – and the legislation ill drive additional native forest logging and allow the burning of whole logs.

“This cut is just the first step for Tony Abbott. He has made it clear he wants to “R-E-D-U-C-E” clean energy even further,” Senator Waters said in a statement.

Environmental groups were not happy. Dan Spencer, media spokesperson for the Australian Youth Climate Coalition labelled it “an absolute disgrace”, Solar Citizens’ Claire O’Rourke described it as a “shameful” and “outrageous” setback for the industry, while Friends of the Earth said it would mean nearly 4,000 fewer jobs in the industry by 2020.

Mark Wakeham, from Environment Victoria, said the commitment to establish a ‘wind farm commissioner’ is a “new low point in climate and energy policy in Australia”. And as pressure builds in the lead-up to UN Climate talks in Paris, the weakening of the RET and the removal of the carbon price “consigns Australia to ‘pariah state’ on climate change.”

Wakeham also question why the Federal ALP squandered the opportunity to support the Victorian Government’s plan to introduce a state renewable energy target. This would have lessened the impact of slashing the RET and ensured additional renewable energy projects proceeded in Victoria.

“It is unclear why the Federal ALP did not support amendments to the RET that would have supported more renewable energy projects in Victoria. It is now up to the Victorian Government to find a different path to delivering a strong renewable energy target for the state.”

The Australian Forests and Climate Alliance (AFCA) said: “We are going back to using dirty medieval technology that pretends to be sustainable and clean. In reality it will undermine real renewables like solar and wind. It will produce more emissions than burning coal and cause immense loss of ecosystems, wildlife and our greatest carbon stores. It’s hard to imagine a worse scenario.”



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  • lin

    I hope the Victorian government steps up, and introduces its own RET once again, to encourage development of more of its immense wind resources. I hope it also introduces legislation to prevent Vic Forests from becoming an even more destructive organisation, backed by the native forest “wood waste” burning green light. Any organisation that views remnant rainforest as “wood waste” needs close monitoring at very least.
    The federal government have again proven themselves to be regressive morons, unable to be trusted to follow independent expert advice, science or even common sense. They need to be removed from power as soon as possible, and until that happens, every effort must be made to limit the damage they are doing.

  • Chris Fraser

    My hope would be in the construction of more than 33 TWh/pa. That is, more renewable capacity than is required to satisfy retailer LGC obligations out to 2020. It appears there’s no punishment if any developer wants to build more than the minimum.There might even be a developer advantage of building more than the minimum … those potential LGCs could be banked, ready for a hungry retailer to snap them up, the moment the retailer RET requirement is increased. Since the price of constructing renewable is falling over time, this would also fuel more construction and competition with yet more renewable.And even if it was not necessary for retailers to find more LGCs, the PPA agreements with the RE developers would provide cheaper energy to retailers and thus put downward pressure on retail tariffs (at least that part of the tariff concerned with purchasing centralised energy). I suspect everyone would win, except dinosaurs.

  • john

    Woos waste.
    This means we can now count all that wood burn in stoves and heating of houses during winter as carbon neutral I guess.

  • Rob G

    I genuinely despair at this government’s never ending attacks on modernising Australia’s energy. Wood waste? I nearly fell off my chair when I first heard that one. Giles, I hope the polls your looking at are wrong, the latest Roy Morgan poll (one of the better ones in my view) has ALP at 54.5% preferred and LNP at 45.5% preferred. That would spell the end to this government. But, as we all know, the Murdoch Labor smear campaign will try it’s utmost to smash Labor’s hopes. Has Australia learnt from the last time they did that? They tried in the UK and they’ll do it in the US. They have already been playing up the Royal commission on Shorten. I would feel true despair if the LNP are returned to office. The one thing I count on is the simple fact that Abbott is the most hated PM in our recent history, and that we as voters have found ourselves ‘smartening up’ as a recent Fairfax study found. It will be time to open that 25 year old scotch if he is kicked out come next election.