Environment Minister Greg Hunt has done a quick about-face on the potential costs of the renewable energy target, and hinted that it was never the Abbott government’s intention to protect the 41,000GWh target.
In an interview on Rupert Murdoch’s Sky News on Thursday, Hunt appeared to endorse the findings of the RET Review panel headed by climate skeptic Dick Warburton, which suggests that the RET be closed to new entrants or phased back dramatically.
Hunt – in good guy mode – has previously insisted that the costs of the RET are very modest, costing households just 3-4 per cent of their electricity bills, even before including the benefits from lower wholesale electricity prices.
On Sky News on Thursday, however, Hunt said the 41,000GWh target – which hitherto had been a bipartisan target – could only be reached at the cost of some “extraordinary” penalties.
The Murdoch journalist did not have the presence of mind to ask what these could possibly be, although it seems clear that Hunt is referring to the fact that Australia’s big three retailers would prefer to pass on the $92/MWh penalty cost to consumers rather than meet their obligations to build wind and solar farms.
This assumes a couple of points – one that the target could not be met, an idea that is prosecuted by the fossil fuel industry but which was dismissed by the RET Review panel’s own modelling – although Hunt knows too well that any further policy uncertainty will cause it, ultimately, to hold true.
The other assumption is that the retailers would dare to try to con their consumers in such a way. Already, they lose one in four customers each year as people look for cheaper options. They are not popular. Imagine the stampede in 2020 if they tried that on.
But Hunt also hinted that it was never the serious intention of the Abbott government to protect the 41,000GWh target in any case. As he told the Sky interviewer, he has said on 20-30 times that the new government supported a “20 per cent” target. He has refused to be drawn on whether this meant endorsement of the bipartisan 41,000GWh target.
Asked again, if this was a breach of an election commitment, Hunt replied:
“Look, with respect, our promise – is that our policy was for a 20 per cent, for a 20 per cent Renewable Energy Target, but that there would be a review which had to come, by law, under the ALP’s own law, it was due to come this year.”
(Fact check: The “law” states quite clearly that it is the Climate Change Authority that must conduct the review, not a hand-picked panel of climate skeptics and fossil fuel lobbyists).
And later, in response to another question, Hunt said:
“Look, what we said at the election is that our policy was for a 20 per cent Renewable Energy Target. But that …. we would have a review to consider it. So I feel very comfortable with where we’re at, at the moment and that we are … very mindful of our – I am very mindful of our election commitments. Very, very mindful.”
And, hey presto, here is a RET Review panel that recommends the immediate closure of the scheme, or at best, a change to a “real” 20 per cent target – a result that would still deliver massive windfalls to coal generators and bring the renewable energy industry to a close in this country.
But, it seems, even a “real” 20 per cent target might be a step too far for this government. Industry minister Ian Macfarlane, who brought the Howard government scheme to a halt a decade ago in similar circumstances, is not convinced there is a need to keep the target open. Hence the need for Hunt to take the “extraordinary cost” line on meeting 41,000GWh.