Why the RET is gold medal-winning energy policy

There’s a reason why the Renewable Energy Target is supported by all federal political parties – it works. The Renewable Energy Target, which aims to generate roughly 20 per cent of Australia’s electricity from renewable energy sources by 2020, has been extraordinarily successful in building a strong clean energy industry, reducing Australia’s carbon pollution, encouraging Australians to take action on climate change, and in reducing the cost of electricity.

The achievements of the Renewable Energy Target are impressive. It has already stimulated more than $10.5 billion of private sector investment in large-scale clean energy projects, and will double that investment over the next decade.

The RET has also helped create a world-leading clean energy industry, with more than 15,000 Australians employed in the solar industry alone.

The Renewable Energy Target can also claim credit for reducing the cost of producing electricity.

You won’t read about this in some newspapers, but research by the REC Agents Association – representing companies that create and trade in renewable energy certificates – has shown that by 2015, electricity consumption will be reduced by 5 per cent through renewable energy and energy efficiency. The cost of producing electricity is at a 10-year low in real terms.

It makes sense that the cost of producing electricity is going down. After all, it’s much easier to get power from a solar panel on your roof, than to get it from a coal-fired power station hundreds of kilometres away.

The cost of producing electricity is falling, but your power bill is going up, and that’s precisely because we are still not doing enough to encourage the uptake of small-scale renewable energy.

It is the cost of transporting the electricity through monopoly network businesses that is out of control. Rising power prices have been caused by massive investment in electricity poles and wires, which has been passed on to consumers through higher charges.

Renewable energy schemes, including the Renewable Energy Target, have only contributed about 3 per cent of the increase in your power bills, according to the energy industry regulator.

Australians have voted with their wallets in supporting the Renewable Energy Target. More than four million Australians now have solar panels or solar hot water on the roofs of their homes or businesses, with solar installations most popular in the outer suburbs of our large cities and in regional communities.

Not surprisingly, the RET is extremely popular, with polling commissioned by the Clean Energy Council showing 90 per cent support for renewable energy. Australians want to see action on climate change and want to see investment in clean energy.

The success of the RET in encouraging clean energy has made itself a target of Australia’s biggest polluters and traditional power companies. They have argued the Renewable Energy Target should be scaled back, or abolished completely.

Such an approach would fly in the face of the global trend to clean energy.

Fourteen of Australia’s top 20 export markets have renewable energy targets. China is committed to installing 21 gigawatts of solar power by 2015 (Australia will have about 3 gigawatts). Japan aims to increase domestic renewable energy capacity by 13 per cent by March 2013. This is where the world is heading, and Australia cannot afford to be left behind.

The establishment of the Mandatory Renewable Energy Target in 2001 was the Howard Government’s greatest climate change achievement. The expansion of the Mandatory Renewable Energy Target from a 2 per cent to a 20 per cent target was the Rudd Government’s greatest climate change achievement, and it was achieved with the backing of all political parties.

The Gillard government can claim the clean sweep with the strong trifecta of carbon price, Renewable Energy Target and $10 billion Clean Energy Finance Corporation, which creates the environment for Australia to remain internationally competitive as the world moves inexorably to a low carbon global economy.

The RET is more important than ever with uncertainty over carbon pricing. As Professor Ross Garnaut has argued, for as long as there is a risk that carbon pricing will be scaled back, the Renewable Energy Target is in the front line of adjustment in driving Australia’s energy sector to reduce carbon pollution.

When you look at all the policies developed by the Howard government, and maintained or enhanced by the Rudd and Gillard governments, the Renewable Energy Target is a gold medal winning policy. It has helped develop a strong and innovative new industry and laid the foundations for Australia’s low carbon future.

The Renewable Energy Target is working, although its work has really just begun. It needs to be left to do its job.

Fiona O’Hehir is vice-president of the REC Agents Association