RET Impasse Costing Australian Renewables Millions

Renewables investment loss

The Federal Government’s drawn-out review of Australia’s Renewable Energy Target is costing the sector between $400 and $500 million a year in lost investment, according to the Clean Energy Council.

An analysis by the CEC says the ongoing impasse will continue to wreak more than $400 million of damage every year to renewable energy projects already operating.

CEC Chief Executive Kane Thornton said the RET had delivered $10 billion worth of investment in large-scale projects to date; investments made in good faith that the legislated target would continue unchanged.

“A breakdown in that bipartisanship has had a material impact on the market confidence in the policy and is affecting the revenue that flows to those projects,” Mr Thornton said.

“We are staring down the barrel of job losses, business closures, negative financial effects on the $10 billion of renewable energy projects already operating, and a halt in the development of new large-scale renewable energy projects across the country.”

Referring to 2014 as a dark year for large scale renewables, Mr. Thornton points out more than $2 billion was invested in 2013, but the first three quarters of this year has seen a comparatively paltry $238 million invested – directly the result of the Federal Government’s apparent determination to gut the RET.

“If the government is genuine about its intent to resolve the current political impasse, move beyond its previous position and support a target that delivers a strong future for renewable energy in Australia, we would encourage Labor to return to negotiations,” said Mr. Thornton.

In November, the ALP walked away from negotiations with the Federal Government that would have resulted in the dilution of the RET.

The CEC briefing paper “Lost opportunity and big costs: The impact of an unresolved RET review” can be downloaded here.

A very recent example of the impact the situation is having is in the NSW Southern Tablelands where a fourth generation farmer had hit tough times – and wind turbines were to be his saviour. However, with the continuing RET uncertainty, the farmer may still have to sell his property – one that has been in his family for four generations. This particular situation goes beyond this single farmer’s woes, with jobs and investment in the local region also at stake.

In October, a major wind turbine tower manufacturer in Victoria announced  it will be shedding 100 jobs; partly due to the RET situation.

Even where concessions have been made concerning the RET, there still appears to be a great deal of devil in the detail. Yesterday, ClimateSpectator reported Environment Minister Hunt’s office communicated that “solar up to 100kw is proposed to stay in the SRES due to the red tape that would be involved if it moved into the LRET.”

There had been fears commercial solar would be lumped in with the large-scale target. Even this good news came with a potential barb. It’s unclear if up-front deeming will remain; i.e. whether the full government subsidy will continue to be made available upfront when commercial solar power systems are installed; rather than incrementally as the power is generated – as is the case with projects under the LRET

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