Tasmania RET impact slammed as bogus, as shadow boxing continues

A new report has rubbished claims that big industries in Tasmania are being penalized by the renewable energy target, suggesting instead that they are enjoying massive subsidies at the expense of other consumers.

The study by The Australia Institute suggests that the RET is in fact a big win for Tasmania, drawing in a net benefit of more than $100 million per year.

Tasmania has become a lightning rod for the debate about the RET, with opponents using its supposed impact on heavy industry, particularly aluminium, as a reason to scrap it or wind it back.

Tasmania has also taken centre state because of the role of newly independent Senator Jacquie Lambie, and the potential for her, other cross-bench Senators, and the Coalition, approving a new RET mechanism devised by Daved Leyonjhelm and his advisor, long time anti-wind campaigner and climate science Max Rheese.

The report also comes as the stalemate – and the shadow-boxing – over the RET between the two major parties continues. The Coalition has written a letter to Labor asking them to resume talks about cutting the current target from 41,000GWh. Labor has refused, saying there is no indication that the Coalition is moving from its position of cutting the target to 26,000GWh – an outcome that is similar to the deal being proposed by Leyonjhelm and other cross benchers.

The renewables industry is more hopeful that there is movement at the station, urging the two parties to resume talks, although mostly out of hope than expectation.

The only way the current investment freeze in the renewable energy industry will begin to thaw is through a negotiated agreement between the two major parties that would return the bipartisan support to the policy,” Mr Thornton said.

“Given what’s at stake, the renewable energy industry expects both parties to return to negotiate in good faith. This would give us reason for cautious optimism heading in to the end of the parliamentary sittings for 2014 and the Christmas season.”

GE also urged talks to resume to try to obtain a “stable GWh target”, although it said it wanted an exemption regime for emission intensive and trade exposed industries and an end to biennial reviews of the RET.

The TAI study, meanwhile, says that the claims by Tasmania’s largest industrial firms that the RET deals a $20 million annual blow to their combined productivity have ben dismissed as bogus.

Matt Grudnoff, a senior economist at TAI, said an anti-RET website, Take a look at the big picture, created by

Bell Bay Aluminium, Grange Resources, Norske Skog and Nyrstar, which trade in aluminium, iron ore, newsprint and zinc, ignore the assistance afforded to the industry under the RET scheme.

Grudnoff says Partial Exemption Certificates, which entitle a firm’s energy supplier to be exempt from the cost of the RET, have covered between 40 – 67 per cent of electricity costs for these businesses.

He says the $20 million figure is bogus and the impact is more likely to be $8.5 million.

“Industrial firms account for 57 per cent of electricity consumption in Tasmania. This includes firms whose electricity costs are being subsidised by nearly 70 per cent,” he said in a statement.

“In practical terms, it’s not households but these industrial firms who are benefitting from the RET assistance – yet many are crying ‘foul’ on the basis of false claims.”

He said Tasmania was drawing in revenue of $125 million every year from RET certificates, because it is the second biggest producer of certificates in the country, behind South Australia, yet only cost electricity consumers $22.5 million state-wide.

“On top of that, the RET generates jobs and investment in renewables, while decreasing the wholesale price of electricity, as has been the case in Tasmania.”

“Clearly, claims made against the RET by industry are not free of self-interest. They should be scrutinised the same as other voices in the national RET discussion,” Grudnoff said.