Greenmail: Abbott tables ‘final offer’ on renewable target

Hopes for a resolution, soon, on the impasse over Australia’s renewable energy target are fading rapidly, after the Abbott government attempted to bully the clean energy industry into accepting a marginally improved offer.

Industry minister Ian Macfarlane said the Abbott government now proposed to cut the large-scale renewable energy target from 41,000GWh to 32,000GWh, rather than to 31,000GWh. It reduces the scale of the cut to the current target to around 35 per cent from 40 per cent.

Even though the offer was only made to the clean energy industry, it was rejected almost immediately – on Twitter – by Labor, with environment spokesman Mark Butler tweeting it was a “waste of time and paper”, and the government needed to aim much higher. 

According to The Australian newspaper, Macfarlane said it was the government’s final offer – although he said the same thing when the 31,000GWh offer was tabled earlier this month, and also promptly rejected.

But the extraordinary game of brinksmanship risks taking a further toll on the industry, which has become stranded by policy uncertainty as the Abbott government moved from its pre-election position of supporting 41,000GWh, to killing the RET altogether, cutting it to a “real” 20 per cent – or around 26,000GWH – and then slowly inching its way forward. (See our story  Abbott government’s 10 biggest renewable energy whoppers on)

Labor – with the support of the clean energy industry and the unions – is pushing for a compromise in the mid to high 30,000GWhs, with 35,000GWh as its presumed bottom line.

The industry reasons that while its prospects are effectively stuffed under the current uncertainty, they would not be much better off with such a low target, which would effectively cripple the industry and result in many international players, and local ones too, leaving the market.

Pacific Hydro has already cut 25 per cent of its staff and put all Australian developments on hold, and Infigen Energy has also focused only on its international portfolio.

Dozens of shovel-ready projects are also stalled, as corporate buyers, local councils, community projects, and other large-scale investments await some clarity before moving forward with investment decisions.

The Abbott government knows this, and is hoping that by threatening to leave the industry with no resolution, it can force it to accept a low offer.

Macfarlane’s latest offer attempts to slice and dice the numbers to pretend that the government is back to the original 45,000GWh target, but this is only by re-including rooftop solar – which has been unimpeded by the political certainty and is now going to grow to three times its estimates of just a few years ago – at the expense of large-scale generation.

The government’s take-it-or-leave-it position came as environmental group ACF called on the government to implement US-style emissions standards to force the closure of old and polluting power stations, rather than use taxpayer funds to provide incremental improvements, or to fund closures.

It re-published data that highlights most of the big emitters in Australia are the coal-fired generators.

Macfarlane has argued that renewables are flooding the market, and wants to turn off the tap to reinforce the earnings of the coal-fired generators. Analysis shows coal-fired generators stand to benefit by around $8 billion if the RET is wound back.

But as this graph below shows, most of the new capacity introduced since the 41,000GWh renewables target was agreed to by both mainstream political parties in 2009 has been fossil fuels – coal and gas – and not large-scale renewables. On top of this, the fossil fuel generators recognise that there is 9,000GW of coal-fired generation that is surplus to requirements, but the coal stations are staying open because their owners do not want to pay the cost of remediation, and are awaiting government handouts.

ACF boss Geoff Cousins says that to seriously cut pollution in Australia we need to transition energy production and use away from polluting sources like coal, to clean alternatives like wind and solar.

“Australia must seriously consider how to start retiring the most polluting and out-dated coal plants and replacing them with clean energy,” Cousins said. “Clean energy alternatives are ready and available. And the big electricity consumers must start to use energy much more efficiently.

“The federal government should also stop paying the big polluters to pollute. The mining and gas companies in the top ten receive handouts in the form of Fuel Tax Credits and accelerated depreciation allowances that lower tax revenue, make it cheaper to pollute and delay the transition to cleaner energy.”

Greens leader Christine Milne said the Liberals wanted to protect the profits of the coal-fired generators and keep the country reliant on them for as long as possible.

“If you want to close something down, Mr Macfarlane, close down coal. Let the Renewable Energy Target keep working to transform Australia,” Milne said.

The Australian Wind Alliance described the latest offer as “hopelessly inadequate”. Spokesman Andrew Bray said the government had again demonstrated that it is happy to let the industry go under by dragging out this impasse as long as it can.

“First it broke its promise not to touch the target. Now it is blaming everyone else for the exodus of renewable energy investment. The government needs to take full responsibility for the job losses they have created and resolve this issue without delay.”