The most common accusation leveled at the Abbott government’s review of the renewable energy target is that it is something of a sham, having been formed with a pre-determined outcome to dramatically reduce the scope of the policy.
The question is, what exactly is this pre-determined outcome?
The most likely – and the one touted around the corridors of power in Canberra for several months (even before the panel began its deliberations) – is that the scope of large scale generation will be dramatically reduced, and the small scale scheme abandoned altogether.
There are a couple of key elements to this. The “spin” from the government will be that it is still maintaining a “20 per cent” target, merely adjusting the settings to reflect changing demand. In effect, what it will be doing is moving the goalposts (quite significantly) at the behest of the incumbent generators, by slashing the current fixed target of 41,000GWh (which was designed to reach “at least 20 per cent” to a much diminished target as low as 23,000GW, depending on which calculations you want to take seriously.
As Origin Energy says in its submission, reported today, this would result in a dramatic reduction of both wind and solar installations over the next five years. And it reduce the likelihood of more coal and gas generation being forced out of the market, because it will mean less competition and higher than otherwise wholesale electricity prices. That’s good for generators.
The second key element is the treatment of the small scale component of the RET. Most big retailers and generators want this gone – rooftop solar is a big threat to incumbents because it eats at revenues at what is supposed to be the most profitable period – the noon and afternoon peaks.
And the emergence of households as a new generation of “pro-sumers” represents the most serious threat to the incumbent business model in a century. So, in order to buy time, the small scale component will either be removed entirely, or folded into the large scale scheme. One suggestion is that it will be phased out immediately for household solar, and gradually for commercial solar.
It is also suggested that another element of the government’s “spin” will be approval for a “couple” of large solar projects, with the intention of countering the argument that the government is turning its back on new technology.
This has all the appearances of Kevin Rudd’s infamous “solar flagships” project – dreamed up “one sunny morning” in 2009, which is still to see the light of day. Only the 153MW Nyngan/Broken Hill project got financing approval after repeated delays and has just begun construction.
Quite how the government would produce a handful of large scale solar projects remains to be seen. There are come projects that may have gotten approval but have not yet been announced by the Australian Renewable Energy Agency. Ironically, ARENA is also marked for closure by the Abbott government, although this requires approval from the Senate.
The concern that the RET Review panel has a pre-determined outcome has been reinforced by the experience of many who have had an audience with the panel, led by climate skeptic Dick Warburton.
Some participants have been told that a draft report is to be delivered to other Abbott government within a fortnight, but will not be made public. The review is being run out of the PM’s office, rather than ministries directly responsible for environmental and energy policies.
Abbott, who has railed against the cost of renewables, Treasurer Joe hockey, who thinks wind turbines are “utterly offensive”, and Agriculture Minister Barnaby Joyce, whose renewable policy we once joked was “100 per cent ignorance” are said to be the key Cabinet players in deliberations.
Even though the RET was introduced as an environmental policy, with emissions abatement as one of its goals, the issue of climate change has been given short shrift in the meetings, which have been held behind closed doors.
On the occasions that climate change has been raised, Warburton is said to have angrily dismissed the issue, saying it is not a subject of consideration for the panel, and that the science has not been agreed.
