RET: the battle lines are drawn

The Renewable Energy target (RET) has been severely scapegoated on electricity prices according to The Australia Institute Facebook:


The Tea Party LNP Government and Labor have agreed to talk, to find a bipartisan position on the RET. The LNP has now set out what must be an ambit claim:

  • The RET will constitute a so-called “real 20 per cent” of Australia’s electricity production.
  • Emissions from intensives industries, including aluminium, copper, zinc and cement will be exempt.
  • The small-scale solar panel scheme will remain untouched.
  • Biannual reviews of the target will cease.

As background, the RET was legislated in 2009 as 41,000 gigawatt hours, representing 20% of the electricity estimated to be produced in Australia in 2020.

Since then electricity demand has collapsed, meaning the 41,000 gigawatt hour target is now closer to 27%.

This was Bill Shorten’s response:

“The government say they want a real 20 per cent, I call it a fraud 20 per cent, a fake 20 per cent. The truth of the matter is that renewable energy is part of our energy mix. It’s had a great benefit for a whole lot of consumers,” Mr Shorten said.

“We’ve seen thousands of jobs created…and we’ve seen billions of dollars of investment. The real damage that this government’s doing in renewable energy cannot be overstated.”

As John Davidson has been saying repeatedly, the damage is already very evident, as shown in this graph:


The renewables industry reaction:

But the renewable energy industry said the target as proposed would devastate the industry and jeopardise millions of dollars in investment.

Lane Crockett, general manager of PacificHydro, said: “What reason can there be [for this cut] other than to protect the coal industry?”

Ironically the LNP position would be seen as something of a win internally for Greg Hunt in the face of the climate scepticism that infects the governing parties.

On the matter of reviews, the LNP have been saying that the Warburton Review was required by legislation. I think the truth is that by law the review should be done by The Climate Authority, which still exists. According to Lenore Taylor at The Guardian:

The Climate Change Authority announced this week it was conducting its own review of the RET before December, as required under law.

I wonder who is paying their bills.

Giles Parkinson points out that The Climate Authority will look at the RET in terms of its contribution to reducing emissions rather than consumer prices. That is novel in the current environment – reviewing the RET in the light of its original purpose!

In that article Christine Milne in estimates hearings chewed out the PMs Department which ran the Warburton review for allowing the review to go beyond its terms of reference and recommending the most expensive options.

The Government is clearly in thrall of the fossil power lobbyists. Giles Parkinson again:

The Abbott government has confirmed that its opening position in talks with the Labor Party is for a “real” 20 per cent target, meaning that the amount of large scale renewable energy being built in Australia over the next 5 years could be cut by two thirds from the current target.

This was one of the key recommendations of the Warburton Review, which made the recommendation despite finding that the cost to consumers would be far less if it left the target at the current level of 41,000GWh by 2020, or made it a 30 per cent target by 2030. (Emphasis added)

Dick Warburton ended up as a very confused puppy. As John Davidson said:

Climate Spectator had this post on Dick Warburton, the Chair of the RET review committee and his performance on a Fran Kelly interview after his review had been released. It gives a picture of a man who doesn’t understand his own report or anything much else apart from the need to recommend the destruction of the RET and all the jobs it has created.

But the LNP are also responding to the popularity of rooftop solar where around “15,000 Australian households add rooftop solar each month, despite the disappearance of state-based feed in tariffs.” After all nine out of 10 households have considered or would consider installing roof-top solar.

Large scale investments are for decades rather than for years. Genuine bipartisanship to a long term commitment is needed. Even if an agreement can be cobbled together in the talks, there is a real question as to whether investors in large scale renewables in Australia will consider it worth the risk.

13 thoughts on “RET: the battle lines are drawn”

  1. Let us do a reality check on large scale renewables:
    1. It is going to take years for an investor in renewables to pay off their loans and get a reasonable return on their investment. (Over 10 years?)
    2, The RET has never provided price certainty to investors. The trading scheme allows the credits given for renewable energy to move depending on supply and demand. The price of credits has fallen since Abbott started stuffing around and creating RET uncertainty.
    3 There has been no commitment to new large scale renewables since Abbott started flagging the need for a review.
    4. Investors are unlikely to return just because the Senate is stopping the target being reduced or, for that matter, if Labor wins the next election. (See1. above.)
    5. Contract based alternatives like the ACT renewable auction scheme provide one way of restarting investment without the need for bipartisanship.
    At the moment, I think that Labor and the Greens should demand that the Tea Party get on with direct action while refusing to do anything to reduce the RET target. They should also go into the next election with a contract based proposal aimed at getting renewable investment restarted while providing a eal alternative to the RET, carbon price, ETS and any other system that depends on long term support from the Tea Party.

    If Labor is serious about renewables it should stop .

  2. Overall I don’t think market and incentive based schemes like an ETS and the RET are going to deliver an emissions free power system as urgently as we need. Some large scale direct action seems indicated.

    We urgently need a program of decommissioning dirty power and the capacity should be replaced by 100% renewables. The Climate Authority should be asked the best way to achieve this and to what degree if any dirty power producers should be compensated.

    I think Labor will institute and ETS if elected, which I suspect will then survive to become part of the scene, like Medicare and the GST. For one thing, Labor will need the funds to balance the budget. By itself, however, it is nowhere near enough.

  3. Brian: All the ETS will do is create unnecessary and sometimes unproductive price increases. RET style offset credit trading schemes make more sense because they don’t need the toxic price increases that are a feature of ETS schemes. Offset credit trading is fine for things that don’t involve long term investments.
    Governments make decisions all the time that disadvantage specific businesses.
    Why the hell should the fossil power companies be compensated when others aren’t ? We are talking about power stations that have been running for a very long time.

  4. John, at this point I’m not arguing the toss about the merit of an ETS. I’m saying I think there will be one, but it’s not enough.

  5. 28 European leaders have made a compromise deal to cut emissions by at least 40% of 1990 levels by 2030.

    This is going to make Abbott’s head in the mud postion of 5% or less more difficult to maintain. So he can slash away at renewable targets for all he is worth, but whatever he does will serve to demolish whatever credibility he has with most business leaders. Businesses want stability, a rationally valued dollar, and a hold on the ever marching labour overhead (best examples being taking compulsory super to 12% and a 1.5% levy for an excessive maternty leave scheme) for which there is no turnover compensation.

    Business on the other hand know full well that the Carbon Tax was a storm in a tea cup and that rooftop solar leads to reduced overheads and strong commercial activity. Whether they voice it or not most business people can do the basic analysis to see that electricity prices are an extortion which will fairly soon turn into a major issue as energy distributors manouvre to lock out rooftop solar.

    Furthermore denialists have painted themselves into a corner with their impending ice age rhetoric only to be dragged back to reality as their darling Judith Curry argues for reduced global warming (not a reversal), Roy Spencer becomes more evidently a religious nut job, and the Australian Chamber of Commerce and Industry’s Steve Kates has accepted that Peak Oil “might” be real and nuclear poeer will dsve us all.despite the rrslity that India is installing 5

  6. That got messed up by a bad internet connection while I was looking at Inia’s nuclear plan, which is quite ambitious. But while India is installing 5 gigwatts of nuclear at present, they are installing 22 gigawatts of solar at the same time.

    So Abbott’s “climate change is a big bad joke that we have to tolerate untill it passes” position will in near time demolish his credibility sooner than he imagines. When Abbott finally has ni option but to admit that he is wrong on Climate Change and he dumps the mess on Maurice Newman, he will have zero credibility as a leader to plan Australia’s environment future.

  7. It’ll be several more years before we get the next environmental “bitch slap” in the Arctic

    I think the next Arctic extreme low ice extent is likekly to pull thr rug out from under the neo cons and the snce-hnce-snce stupidity. Not that is not a new SOS, it is “see no climate evil, hear no climate evil, speak no climate evil”.

  8. We have elected successive governments to govern and what have they done? They have worked very actively against OUR overall interests and worse yet, rewarded firms, with OUR money, for doing us harm.

    So let’s ignore the all the bleating of the media, cause as much discord as possible at pre-selections, get rid of all present members of all parliaments, have very noisy elections and get in anyone at all who will deliver on making excessive production of greenhouse gases a criminal offence with mandatory imprisonment and confiscation of all assets. The new anti-oultaw bikies law has shown us the way – so let’s apply similar laws with even more vigour against those firms and the people who run them.

    The markets haven’t worked. Being lovey-dovey to business hasn’t worked. The carrot hasn’t worked – so now it’s time to reach for the stick, a whopping big stick – and to swing it vigorously. Once a few dozen firms have been shut down abruptly, their entire boards and upper management sentenced to long terms hard labour, their nice homes and cars and valuables put up for auction, then the rest of the business world will get the message: comply or suffer the same fate.

    Of course making such Strong Choices (c) will cause a flight of capital. Good! The capital that will flee is the sort of capital we don’t want here.

    We have a straight forward choice: we can get tough now – or we can wait around to be fried.

  9. Perhaps we should rebrand climate action in a way that attracts the support of of macho men suffering from masculinity insecurities. Direct action on testosterone perhaps?
    For example, we could aggressively ramp down the amount of fossil carbon that can be extracted from the ground or imported over our borders. That includes importing unclean things made using fossil carbon.
    GB@8 has some useful suggestions re what to do to cheats that try and get round these rules. Or perhaps turn them over to that nice Scott Morrison?
    We would also need some simple slogans like “Stop the carbon” or “Stop the carbon boats.” or ?????

  10. I must say, the criminalisation of the production of greenhouse gases has some appeal, and is actually based on sound logic!

  11. Jon D @ 9: You’ve hit the nail right on the head there with appealing to all those muscular fellows – and women too, nowadays.

    I’m thinking of what appealed to those who volunteered to become Christian missionaries in darkest Africa and other untamed places in the 19th Century. We could learn something, too, from the “Shoot with a camera, not a gun” campaign in the mid-20th Century: it takes courage to abseil down to get close-up photos of seabirds halfway down a windblown cliff or to stand in front an unhappy bull elephant with nothing more than a 35mm camera and a 200mm telephoto lens; any boofhead with more money than sense can get out and shoot a big animal with a hand-held artillery piece; an animal, by the way, that a crowd of beaters has chased into the semi-killing ground and an animal that is generally put out of its misery by a competent safari guide; (you should hear the stories of former safari guides!!!).

    One of the main troubles with many conservationists and those concerned with climate change is that they present their cause as being very sissy and wimpish with nothing more dynamic done than screaming abuse at police (as though the police had any influence at all in corporate policy) or chaining themselves to something or other.

    No wonder so many young people, concerned though they may be about conservation and climate issues, regard the activities of those supposedly upholding these causes with utter scorn. Totally un-cool. Who can blame them?

    So why not leave all the fairies at the bottom of the garden – do practical things that show you really do mean business – speak with knowledge and authority – stand your ground firmly but politely – get out of the demonstrators’ uniform and wear, for instance, a football jumper or a taekwondo t-shirt or (heavens-to-Betsy!) an orange or lime-green safety work shirt. If you want to be tough then look tough – instead of looking like weaklings, spoilt kiddies and woolly-headed ratbags.

    Brian @ 10: Given the damage that is done to individuals, communities and the whole planet, I cannot understand why these crimes have not been added to the Criminal Code

  12. Graham: Have you thought about starting the “Extreme Greed Action Party” (EGAP) (or something similar with a better acronym.) The action plan you have would have outlined above would have a much better chance of getting media attention than what Christine has to say.
    My problem is that all my work shirts are orange with luminous stripes.
    As a matter of interest Christine Milne said to me yesterday that she approved of the contract based ACT Solar Auction Scheme.

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