What happens if agreement is reached on cutting Australia’s RET?

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New Zealand’s TrustPower outlines just what is at stake if Australia’s renewable energy target is cut.

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There has been a lot of talk – on RenewEconomy and other websites and in the mainstream media – about the big developments in the renewable energy target, and the call by the Clean Energy Council, along with other industry bodies, for a compromise.

There is no certainty that will happen. The CEC has suggested 33,500GWh, but the Abbott government has signalled it has no intention of moving above 32,000GWh. Labor has so far said it sees no reason to offer less than 35,000GWh.

But what will happen if such a target is agreed? So far we’ve had little insight, but these graphs from New Zealand company TrustPower, which built the last major wind farm in Australia, the 270MW Snowtown 2 project, give some insight.

First of all is TrustPower’s appraisal of where the target is at now, given at the annual investor day presentation by its parent company Infratil. The current target is 41,000GWh, but is effectively there in name only, given that the Abbott government refuses to endorse that target. With no policy certainty, not a lot will get built.

The blue line here (pessimistic target), is the so-called “real 20 per cent” adopted by the Warburton Review and by the Abbott government, equivalent to around 26,000GWh. The blue shaded area shows the likely outcome between 30,000GWh and 35,000GWh.

infratil

What does this mean? As RenewEconomy reported last week, probably a cut of at least 3,000MW of planned renewable energy installations, a cut of around $6 billion in investment and the loss of several thousand would-be jobs. The solar industry, aggrieved by the compromise proposed by the CEC, fears that it will be the most affected by this reduction because it is further down the cost curve.

This graph from TrustPower gives a detailed breakdown. Note that its estimate suggests that an agreed target of 30,000GWh would result in a halving of new renewables required over the next five years.

infratil ret outcomes

This next graph shows just how far Australia has fallen in the eyes of international investors such as TrustPower. Over three years, Australia had been a big improver on investment attractiveness, but in the last year its ranking has plummeted. Only the UK has fared worse.

infratil markets

Still, Trustpower says all is not lost. It has around 2,500MW of wind projects in the pipeline – in Victoria, South Australia and New South Wales – and with some policy certainty is interested in new opportunities in grid connected solar, as well as hydro and other wind projects.

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9 Comments
  1. barrie harrop 5 years ago

    Aust PM is working hard to destroy our renewable energy industry ,so far he has made us he laughing stock on the renewable investment world .

    • michael 5 years ago

      why not assist the $6-18B of investment find a home which actually has an energy supply shortfall? that would be the best result for the globe as a whole, instead of forcing it into an oversupplied market

      • michael 5 years ago

        south africa comes to mind with their regular black outs

      • barrie harrop 5 years ago

        it maybe worth you time to add up all the dirty coal fired plants that have past their use by date .

        • michael 5 years ago

          So we aren’t in oversupply? Are you talking use by date as in the original estimated life or actually unable to continue operating?

          I thought I had read in this newsletter about the oversupply… Oh well, must have misread

        • Raahul Kumar 5 years ago

          The negative health impacts of coal are also important. Best to close them down as fast as possible.

    • Waltzin Matilda 3 years ago

      My attorney, Richard Jachoff has retained the Australian solicitors Dewey, Screwem and Howe to take a look at Barrie. Dick Jachoff is keeping me apprised of their results.

      The mail is coming at a great rate of knots and his track record is coming together rapidly. It’s going to be quite illuminating to the readers. It even surprised me.

      I must say at this stage it’s not looking good for him. There will be some more coming later today and we expect this is going to be the end of his posturing on these pages.

      Already we have learned that at least 14 convicts named Harrop were transported to Queensland alone, between 1789 and 1841.

      http://onesearch.slq.qld.gov.au/primo_library/libweb/action/search.do?fromLogin=true&vl%28freeText0%29=harrop&submit2=%20Go%20&dscnt=0&ct=search&vid=FamHis&scp.scps=scope%3A%28IC%29&fn=search&dstmp=1267028943239&fromLogin=true

      Sheer coincidence, I’m sure… 🙂

      Waltzin Matilda

  2. Alan 5 years ago

    Barrie, not just the laughing stock of the RE world. And Michael, best thing we can do on this front is get the really dirty power stations offline – eg. brown coal, which Australia has plenty of. And not sell the stuff elsewhere either!

  3. Ketan Joshi 5 years ago

    It’d be interesting to compare this to a base case of ‘what happens if the current uncertainty continues’. Is that a possibility?

    Including both the wind industry and the large-scale solar industry, in the long term.

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