The Abbott government on Monday laid out another ultimatum on the clean energy industry to accept a much reduced renewable energy target – or else – as it continued its farcical claims that its Direct Action fund could address Australia’s emissions reduction target.
Industry minister Ian Macfarlane and environment minister Greg Hunt called yet another meeting of representatives from the renewable energy industry, the aluminium industry, unions and the incumbent fossil fuel industry (the big three retailers) to a meeting in Canberra.
Attendees at the hour-long meeting in parliament house were told again – contrary to some expectations of an improved offer – that the government’s position was a “take it or leave it” offer of 32,000GWh, a cut from the current large scale target of 41,000GWh.
The government is refusing to even concede that this is a cut, with Hunt arguing that – with the addition of an expected 13,400GWh of rooftop solar – this would amount to 23 per cent renewables by 2020 – which he claims is well beyond the Coalition’s commitment to a 20 per cent renewable energy target.
(Hunt last week castigated RenewEconomy’s 10 biggest renewable energy whoppers story, which pointed out that Abbott, Hunt and others had promised no changes to the RET. Hunt protested that we should have focused more on his obfuscations when he deliberately avoided hard numbers and said only that the Coalition supported “20 per cent” renewables).
The renewables industry is aghast because a new target of 32,000GWh for large scale renewables will effectively cut the task in hand by more than one third. It will mean that instead of 25,000GWh being added in the next five years, only 16,000GWh of large scale wind or solar will be built.
Labor has described the 32,000GWh offer as “unacceptable”, and has drawn the line at 35,000GWh, with a preference for the high 30,000GWhs. But Macfarlane and Hunt are now threatening to go around Labor and seek a deal with cross-benchers. They told the meeting on Monday that they could strike a deal with “seven of the eight” cross benchers.
This is not believed, because those cross benchers who would accept a deal are more interested in putting a stop to wind energy, and encourage other technologies like solar, something that this proposal would fail to do. But it is a moot point anyway. The purpose of the meeting with industry on Monday was to underline that scenario, and to try and convince the clean energy industry to get Labor to negotiate below their 35,000GWh target.
And there are signs that there are divisions within the clean energy industry. Some with cheaper shovel-ready wind projects appear ready to accept a reduced deal because it means at least their projects will get built. Others – developers of second tier wind projects and large scale solar projects – want to hold out for a higher target, and a time extension.
Indeed, it highlights one of the long-accepted weaknesses of the clean energy industry in Australia. While their opposition, in the form of vested interests in the coal industry and deep ideological opposition to renewables, are united, the clean energy industry is split with different technologies at different stages of the cost curve.
But all are sidelined by policy uncertainty. This will be one of the key weeks for the industry, knowing that failure to get agreement now could push a resolution out beyond the mid-year.
This came as The Climate Council released a report highlighting the massive growth in the renewable energy industry world-wide, as the same time as the industry was contracting in Australia.
“In Australia, the renewable energy industry is in free fall,” the report said. “Investment has dropped by 88 per cent due to policy uncertainty.” Yet this occurred as 800,000 renewable energy jobs were created around the world in 2012/13, while in Australia the jobs numbers fell 13 per cent as the large scale sector effectively came to a halt.
Meanwhile, 22 environmental, social, religious, youth, health and renewable organisations wrote to the the Prime Minister calling him to step in and endorse the current renewable energy target of 41,000GWh.
“The Prime Minister promised Australians he would maintain the existing Renewable Energy Target and he must stick to his word,” Australian Solar Council chief executive John Grimes said. “Tony Abbott should step in and stop his Government taking a wrecking ball to renewable energy.”
WWF-Australia CEO Dermot O’Gorman described it as a “pivotal moment” for Australia.
“The rest of the world is turning to renewable energy. We should be getting on board with this global momentum, supporting this industry, not going backwards.”
The events in Canberra came as Hunt released new data that showed Australia’s emission reduction task to 2020 is much reduced – now 236 million tonnes – a figure that he argued showed that there was no need for a carbon price.
However, the data was rejected by independent groups, who said there was no surprise in the new figures. Instead, it confirmed that Australia’s emissions were rising and that the Emissions Reduction Fund would have to achieve a “ridiculously low” price for abatement in the next five years, let alone find the funds to meet more ambitious targets in the future.
Greens leader Christine Milne said the Abbott government’s global warming denial was on full display, given the new data and its renewed attempts to slash the renewables target.
“The depth of this government’s denial is alarming,” Milne said in a statement. “They’re condemning Australia to economic dislocation, to being way behind the rest of the word, and to making life harder and more dangerous for everyone in our region, as extreme fires and storms intensify.
“Today we’ve got the Environment Minister doing dodgy accounting to say he’s going to meet a truly pathetic emissions reduction target, we’ve got Minister Macfarlane hosting industry reps to push his huge cut to the Renewable Energy Target, and we’ve got Julie Bishop bringing in a climate policy sceptic to talk to staff about delivering better foreign aid.”
(The latter is a reference to the invitation to Bjorn Lomborg, a “climate contrarian” that Bishop describes as a “creative thinker” to address staff on foreign aid strategies).
“If you’re going to help our Pacific island neighbours, you have to acknowledge that they are already suffering the impacts of climate change,” Milne said. “Vanuatu’s president said so himself. The Abbott government needs to stop its obfuscation and get real.
“The independent Climate Change Authority says we need to be cutting emissions 40 to 60% by 2030, but Greg Hunt’s response is to just kick back, put up his feet and prop up coal, because we might get to 5% by 2020,” she said, noting that this reduction even included a significant credit from Australia’s generous Kyoto agreement, which allowed for a rise in emissions.
