CEC gives concessions in hope of sealing RET deal by Xmas

Australia’s main renewable energy lobby group has said it is agreed to give large concessions to the aluminium industry in the hope that the political deadlock over the renewable energy target can be resolved by Christmas.

The Clean Energy Council chief executive Kane Thornton said he had joined forces with the Aluminium Council to propose a  full RET exemption for aluminium smelting in the hope of securing a meaningful target for the renewable energy industry.

This is a slight evolution from its position adopted a month or so ago, when it issued a paper that “recognised that there may be a special case” for an increased exemption for aluminium smelting under the RET.

Now it recognises that need has become even more political, and its move to embrace that recommendation  highlights the increasing concern that the deadlock will cost jobs and cause international investors to leave.

“I want a deal by Christmas,” CEC chief executive Kane Thornton said. “We all want a deal to be done. What we doing is trying to get the parties back to table and negotiate this.”

Last week, the Labor Party said it had walked away from talks with the Abbott government, accusing the Coalition of refusing to budge from its position of cutting the 41,000GWh by 2020 to around 27,000GWh, what the Coalition now calls a “real” 20 per cent target.

Labor, it is thought, is prepared to negotiate a deal of the mid to high 30,000GWh. The deal with the aluminium council effectively brings the target to 39,000GWh, and it is thought that the CEC could live with a slightly lower target.

That’s because the Coalition holds the trumps. As long as there is no bipartisan agreement on what the target should now be, investment will remain stalled. Little in the large scale sector has been built for the past two years.

“This is a gesture to help things happen,” Thornton told RenewEconomy. “At the end of the day, the large scale industry is frozen. And until it is resolved, it will remain frozen … people will lose their jobs, industry will pack up and leave the country.

“We want to avoid that, but we are not prepared to accept the current government proposal. But we are prepared to support exemption if we can get them back to table.

The CEC says the government’s starting point to negotiations is clear, but there is no evidence it has moved from that. “It doesn’t bode well,” Thornton said. “That’s part of why we released this letter.”

Infigen Energy chairman Mike Hutchinson told the company’s annual general meeting on Thursday that Australia needs an early outcome that is certain and is “transparently based on the substance” of the issues. “A secretive political horse-trade based on partisan one-upmanship will not serve the national interest of a country that is “open for business”,” he said.

CEO Miles George, who also chairs the CEC, said large reductions cannot be supported because the Government’s own review found that consumers, taxpayers, the economy and the environment would suffer if the RET was reduced.

Meanwhile, leading economist Professor Ross Garnaut says embracing wind and solar energy will give Australia an advantage in global manufacturing of metals and chemicals.

“It’s realistic to see us coming back to being the world’s natural location for energy-intensive industries once the world as a whole has shifted to having a high proportion of renewable energy,” Professor Garnaut told The Australian Financial Review.

Garnaut said Australia has a huge advantage in renewable energy-just as big an advan- tage as it has had in fossil fuels – with the added benefit that it can’t be traded away to other countries as our edge in coal and gas has been.

“I am saying that we’ll get our advan- tage back, but after a lot of destruction,” he said. “It’s the world the IEA [Interna-tional Energy Agency] is already saying we’re heading for. The current mega- trends would have to change dramatically for this world not to emerge.”