The demand by 25 Coalition MPS to lower the renewable energy target and give the aluminium industry a free exemption, along with some ad-lib policy making by Palmer United Party Senator Jacqui Lambie, is underlining the uncertainty that still exists for the renewable energy target.
As we noted last week, Clive Palmer may well have declared support for the renewable energy target to be kept as is, but that is no guarantee of an outcome.
The renewable energy industry, in desperate need of policy certainty to force retailers to write contracts and bring financiers to the table, is facing three major uncertainties.
The first uncertainty is the discipline of the PUP Senators, as underlined by The Australian newspaper’s report on Monday that Lambie wants Tasmania – already nearly 100 per cent renewable – wants Tasmanian businesses exempt from the RET scheme. PUP has already flipped twice on renewables, there’s no guarantee they won’t do so again.
The second issue is longevity. Palmer’s guarantee out to 2016 is effectively the same promise made by Labor when it was in government after the last RET review by the Climate Change Authority. But the mere prospect of a change under Tony Abbott was enough to stifle investment.
It could be another six months before any RET review is completed and changes introduced to parliament. By then, under current law, another review would be required to start within 12 months.
The third uncertainty is the deep antipathy to renewables within the Coalition.
The petition by the Coalition MPs. led by Victoria’s Dan Tehan, underlines the strong anti-wind and anti-renewable push in conservative ranks. Remember that Ian Macfarlane, could killed the RET under the Howard government despite having a panel review support its expansion, is now considered a moderate.
Greg Hunt, another seen as a renewables-supporting moderate, has no say in the matter. The RET Review, and the final decision, is being led by Tony Abbott’s office, where right-wing ideology underlines a strong anti-renewable, and anti-climate policy.
The petition does not include the names of Treasurer Joe Hockey, who finds wind turbines “offensive”, Tony Abbott, who has railed against the policies in the past, and numerous other Cabinet ministers who have decried renewables in the past.
(The solar industry is also facing uncertainty because many parts of the small scale renewable energy scheme – SRES – can be changed by executive order, rather than legislative changes, and not be subject to a vote in parliament).
The focus on aluminium is likely to get a sympathetic hearing from the RET Review panel, with Dick Warburton apparently telling audiences that he is more concerned about aluminium jobs than he was about renewable energy jobs.
The Australian Greens noted that the aluminium industry already gets a 90 per cent exemption – and said it should not be fully exempted from the Renewable Energy Target.
“The Renewable Energy Target is working to bring down pollution and power prices, but exempting the biggest polluting industries from the scheme would just totally undermine it,” said Greens Leader Christine Milne.
“The point of the Renewable Energy Target is to see the whole economy move away from this unsustainable and unhealthy use of polluting fossil fuels.”
She also noted: “The Greens welcomed the Palmer political party’s commitment to uphold the existing Renewable Energy Target, but now with Jacqui Lambie freelancing in Tasmania and saying the entire state should be exempt, it’s more clear than ever that there are no guarantees of anything in this new Senate.”
Russell Marsh, from the Clean Energy Council, said if the aluminium industry was given a total exemption means that homes and businesses will need to pick up the tab.
He noted that Australia’s aluminium smelters are generally older and less efficient than world standards, and this was acknowledged by Alcoa in announcing the closure of its Port Henry plant.
“While several smelters have recently announced that they will close, neither of these mentioned the Renewable Energy Target as a contributing factor. Smelters are facing much greater pressures from other factors such as a high Australian dollar and low prices for aluminium.
“It is ultimately a matter for the Federal Government to decide whether households and businesses should have to foot the bill for the aluminium industry to enjoy a greater exemption from the Renewable Energy Target than the 90 per cent already in place.”