Combet: Coalition causing “mayhem” on renewables investment

Climate Change Minister Greg Combet says the government is doing “everything it can” to provide certainty for the renewable energy industry, but conceded that confidence in investment was being undermined by the Coalition’s ambiguous stance on the renewable energy target.

Despite endorsing the Climate Change Authority’s support for the 41,000GWh fixed goal for the Renewable Energy Target, many in the renewables industry fear that investment will remain choked by confusion over the future of the target, and what will happen should, as appears likely, the Coalition wins government in September. The Coalition repeated on Thursday that it supports the “20 per cent” target, but is indicating behind the scenes that does not mean support for the current GWh goal in the face of declining demand.

“The Coalition is just creating mayhem for people,” Combet said on Friday. “And this is why, frankly, there needs to be a clear debate, free of all this other rubbish, so that people in the community and the business community can hear what the alternative positions are. Labor is for certainty about renewable energy investment, the Coalition is a mess on the issue.”

Combet held a “doorstop” conference in Manly on Friday morning, and RenewEconomy was on hand to throw a few questions about renewables to the minister:

RenewEconomy: In the middle of yesterday’s events you did announce the confirmation of the Renewable Energy Target. Could you explain, one of the key things for the industry is the timing of the next review in 2016. When will you be introducing that legislation to Parliament and what are the risks of bringing that legislation to Parliament?

COMBET: Well we will be bringing legislation to Parliament to implement the recommendations that we have indicated. The important thing, there are two important things, one is the acceptance of the Climate Change Authority’s recommendation about fixed gigawatt hour target. We are very committed to renewable energy and we have accepted that recommendation. We have also accepted the recommendation that there should be four-yearly, not two-yearly reviews. Both of those decisions, or those recommendations and the Govenrment’s decision to accept them, are about providing investors in the renewable sector the certainty to make the investments that are necessary. And so the risks that you ask about are essentially about what the Coalition does in relation to them. And the Coalition’s position it appears to me is a bit all over the place. They don’t appear to accept and respect the fixed gigawatt hour target. Certainly people like Senator Boswell wanted it all junked. Tony Abbott has hinted that he would be changing it. Greg Hunt has said he will actually do a review if the Coalition is elected within six months. I mean it is just a ridiculous situation. So we will be keen to get legislation through for a four yearly review.

RE: But that is having an effect on the industry because they say there is uncertainty still, that the projects may not be bankable. Are you concerned about that?

COMBET: Well I’m doing everything I can to provide the industry the certainty to be able to invest. There is a lot of investment to take place through to 2020 to achieve the Renewable Energy Target and to reduce the emissions intensity of our electricity markets. The Government is doing all it can to promote the certainty for that investment to occur. The Coalition is just creating mayhem for people. And this is why, frankly, there needs to be a clear debate, free of all this other rubbish, so that people in the community and the business community can hear what the alternative positions are. Labor is for certainty about renewable energy investment, the Coalition is a mess on the issue.

RE: Are you concerned the major utilities will implement some sort of capital strike, and this will delay investment, as hinted by Origin this week and there is very little you can do about it?

COMBET: I wouldn’t anticipate that occurring. The Government is very committed to the RET. The business community can ask the Coalition what on earth it is on about and make representations to it about the importance of investment certainty. The trouble is that the Coalition has a number of different positions. There is apparently to be another review in six months. Tony Abbott has expressed a lack of confidence in the RET. Senator Boswell doesn’t want the Renewable Energy Target, their star candidate in the seat of Hume, who appears to be vaguely economically literate compared to Tony Abbott anyway, he just seems to want to get rid of the RET. It’s the Coalition that is creating all the problems on this issue. They need to tidy themselves up.

RE: Is there any thought at all of altering the carbon price before the election. You have got a fixed-price to 2015 but there is a lot of talk that Tony Abbott’s threat to repeal will in fact just reduce the price or accelerate the transition to a market scheme. Is there any thought at all?

COMBET: No. No. That’s another thing that’s important that people have the confidence to know that the policy settings are there and will remain there. And the carbon price is working. Aside from all the political rhetoric and Chicken Little campaign that Tony Abbott has run what we are seeing is that the emissions in the electricity market are reducing with the carbon price in place. There is a greater contribution of renewable energy to the electricity market and there’s change taking place in many parts of the economy where emissions are being reduced and energy efficiency, large energy efficiency improvements are being achieved. So it is working. We have implemented it in a socially fair way with tax cuts, pension increases and the like. All of the rubbish that Tony Abbott went on about really has been shown to be the most ridiculous hyperbole as we said it was.

RE: You’ve got the emissions trading scheme in, you’ve got Renewable Energy Target legislation. Is there anything else to come before the end of Parliament?

COMBET: We have got a pretty fair package of measures there for the clean energy transformation of the economy. I think we have got a pretty fair package of measures there. What we are still rolling out of course are grants under the Clean Technology Investment Program and other energy efficiency grants. And what we are seeing from those grants, when they are co-investments with individual businesses, are massive step changes in energy efficiency, dramatic cuts to energy costs, and dramatic reductions in emissions. We have put a particular emphasis on the food processing sector and worked very closely, for example, with abattoirs and meat processors and the results there are really stunning.

RE: But you haven’t really sold to the public yet have you, and it is important to do so.

COMBET: Lots of work to do and again why I made the comments I did at the start of the stand-up here. And that is that the Government and the Prime Minister in particular needs the clear air to be able to explain exactly what we are doing, how our policies are working, how we are benefiting the community. And we are doing major things in that regard for people and there has got to be an end to the internal division. Now there is an end to it and I think all of the colleagues are recognising that including Kevin Rudd and his supporters are recognising that is it. Labor has to get on and argue its case to the community without this sort of nonsense going on any more.