The Labor Party has bowed to pressure from major industry lobbyists and fallen in line with the Clean Energy Council’s proposal to slash the renewable energy target by nearly 40 per cent, but the Abbott government is digging in its heals and has immediately rejected the offer.
The CEC last month controversially suggested cutting the RET target for 2020 from 41,000GWh to 33,500GWh, in the hope it would meet a compromise between the Coalition government, which wants to cut it even further, and Labor, which had previously set a range of the mid to high 30,000GWh.
Labor said it would support the CEC position, saying the certainty was needed for the industry and the impasse that has frozen investment for nearly two years needed to be resolved.
“Every day this matter drags on, more jobs are lost and every day the uncertainty continues, projects are shelved and future jobs are lost. Tony Abbott must end the uncertainly and accept the renewable energy industry’s compromise position today,” ALP leader Bill Shorten said.
But the offer gained short shrift from the government, with Industry Minister Ian Macfarlane saying the Abbott government would not budge above its latest offer of 32,000GWh, and adding it would prefer the target to be less than 30,000GWh.
Macfarlane told journalists at the launch of the government’s energy white paper in Brisbane, that the Coalition had already made several offers – its initial target being 26,000GWh, although he had said previously said his starting point had been 21,000GWh.
Labor said that if elected at the next election, due by the end of 2016 (or possibly early 2017), it reserved the right to expand the RET, “to bolster investment, specifically in large-scale solar.”
This appears to recognise the position of the solar industry, which has been hugely critical of the CEC move for a compromise, saying it would effectively kill the opportunity to developer big solar at scale in Australia.
Indeed, the only companies that have publicly supported the CEC decision have been the major wind energy companies. Wind is seen to benefit from an early resolution to the RET – and a cut to the target – because it has lower technology costs, at least in the near future.
Infigen Energy said it supported the ALP decision, and Senvion, a wind farm developer, also lent its support, saying the industry was desperate for policy clarity. It hinted at a move overseas if the issue was not resolved.
“If a reduction in the RET to 33,500 GWh is the only way to achieve bipartisan support for renewables in Australia, then we can see no other way forward for the clean energy industry,” CEO Chris Judd said in a statement.
“While global investment in clean energy is hitting record highs, investment in Australian renewable energy projects has dried up. Without a healthy market for clean energy in Australia, companies like Senvion will be forced to look overseas for the next investment opportunities.
“We are close to finishing work on wind farms financed before the RET review. We urgently need a resolution to the current impasse on renewable energy otherwise our operations in Australia will be under threat. Major developments, like the $1.5 billion Ceres project in South Australia will not proceed while the future of the RET remains uncertain.”
But Macfarlane, who has previously acknowledged that the majority of the cabinet does not support renewable energy, said the Coalition’s offer was “as high as we can possibly put it without putting in jeopardy the stability of the scheme.”
The Australian Solar Council said the government has made no successful argument for reducing the Renewable Energy Target. “Its crusade against renewable energy is driven by ideology,” CEO John Grimes said in a statement.
“Letting the renewable energy industry collapse, trashing billions of dollars of investment and over 10,000 jobs was the preferred choice for the Abbott Government … A deal at 33,500 gigawatt hours will not deliver for large-scale solar.”