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The clean energy industry and Labor have immediately rejected the Abbott government’s opening gambit in negotiations to find a bipartisan agreement on the future of the renewable energy target.
The plan would protect household solar installers but, according to the industry, it would kill two-thirds of planned large-scale clean energy investments. Labor rejected it as a job-killing “phoney” offer before it was even announced.
The government had originally signalled it wanted even deeper cuts to the target – which requires 41,000 gigawatt hours of energy to come from renewable sources by 2020 – and commissioned businessman and self-professed climate sceptic Dick Warburton to undertake a “review”. Its main recommendation was for the target to be slashed to around 16,000 gigawatt hours.
But after fierce resistance from industry and concerted criticism of that review, the federal cabinet has asked the environment minister, Greg Hunt, and the industry minister, Ian Macfarlane, to try to reach a bipartisan agreement about the future of the program that would allow continued investment without fear of policy change.
With those talks set to begin on Wednesday afternoon, Macfarlane revealed he and Hunt had written to Labor setting out a “commonsense” plan as the “basis to our negotiation”.
He said that would be a target representing a “real” 20% of the current energy market – probably around 26,000 gigawatt hours – with no change to the subsidies for household rooftop solar panels and a full exemption from the scheme for all energy intensive industries, like aluminium, copper, zinc and cement.
The Clean Energy Council, which represents the renewables industry, said “the so-called ‘real’ 20% … would actually decimate the industry.”
“Such a move would leave many projects and companies financially stressed, billions of dollars in lost investment and thousands of jobs foregone. We are already about 40% of the way to meeting the legislated 41,000 gigawatt-hours of large-scale generation. If we were to reduce this target to a ‘real’ 20%, it would actually mean a cut of almost two thirds of the additional large-scale renewable energy required to be built,” said the CEC’s acting chief executive, Kane Thornton.
“Not only that, but the modelling for the RET review by [the consultants] ACIL Allen showed that any scenario where the level of the target was reduced would lead to higher power prices for consumers in the future.”
And the opposition leader, Bill Shorten, had rejected the starting pitch before Macfarlane had even announced it.
“Labor strongly believes we should have a bipartisan approach on a renewable energy target but it can’t be at the expense of a renewable energy target. Labor has made it clear that we will engage in discussions but we’ve got no-go zones,” he said.
“The government wants a real 20%. I call it a fraud 20% a fake 20%. We have seen thousands of jobs created and billions of dollars in investment … before Tony Abbott and his crew of climate sceptics took over we were ranked fourth for renewable energy investment, now we’ve slipped to 10th.”
Labor has said it would consider some reductions in the scheme but not to the extent proposed by Macfarlane. It has supported an exemption for the aluminium industry.
Macfarlane and Hunt also proposed that a legislated requirement for the two yearly reviews be removed.
The Climate Change Authority announced this week it was conducting its own review of the RET before December, as required under law.
Macfarlane said any deal reached with Labor could not be legislated until next year and would not begin until 2015.
The Australian Wind Alliance said the government’s announcement showed that its “attack on renewable energy” had entered a new phase. “The government seems to have learned nothing from the failed Warburton review,” the alliance’s national coordinator, Andrew Bray, said.
The Solar Council welcomed the government’s dramatic shift in attitude towards its operations, but said Labor was right to reject out of hand the government’s starting “offer” on the target for large-scale renewables.
“Just a few short months ago they wanted to abolish the small-scale renewable energy scheme,” the chief executive of the Solar Council, John Grimes, said.
“Of course this is a very positive development” but he said the proposed cut to the large-scale target would amount to a 60% cut and “kill large-scale solar in its tracks”.
