The conservative Liberal-National government’s review of the Renewable energy Target (RET) has been described by the renewable energy industry as heading to a biased and predetermined outcome.
The industry view comes after it learned that the review was conducting electricity industry modelling on the assumption there would be no risk or cost to investments in coal-fired power stations in the next few decades.
The RET review, headed by veteran businessman and self-professed climate sceptic Dick Warburton, and its modellers from ACIL Allen consulting held a workshop with industry participants this week.
It was then that they revealed the modelling would assume investors in fossil fuel generation would not need to factor in any risk due to climate policies for decades, neither a carbon price, nor a requirement to invest in emission-reducing technologies, nor any cost from any other government policy or regulation.
Many of the 50 participants said this assumption was entirely unrealistic.
The target, introduced by a former Liberal-National government and expanded by the former Labor governments, now requires that 41,000 gigawatt hours of energy be sourced from renewable energy by 2020.
John Grimes, chief executive of the Australian Solar Council, said it made the whole review a farce.
Mr Grimes said; “at the end of the first stakeholders’ meeting, we can only conclude that the RET Review process is heading to a biased and predetermined outcome.”
Asked if the review would model the benefits to network operators from distributed solar PV installations and the reduction of wholesale electricity prices resulting from renewable energy generation, the Expert Panel and modeling team responded that such modelling was “too hard” and would not be done as part of the RET Review, Mr Grimes said.
Further, the Expert Panel and modeling team said that these types of benefits amounted to a “wealth transfer” as opposed to “true benefits”. ignoring the direct benefits to electricity consumers.
The Expert Panel and modeling team also made clear that carbon pricing in any form would be excluded from their modelling up to and beyond 2030 and that the impacts of La Nina and El Nino weather patterns would only be assessed from historical data and would not include any CSIRO/BOM forecasting.
Mr Grime said the Expert Panel and modelling team tabled fossil fuel price forecasts for both gas and coal up to and beyond 2030.
These forecasts showed flat fossil fuel prices remaining at around 2014 prices for more than 16 years into the future.
He said that as well the Liberal-National government’s one million solar roof policy would not be included in modelling unless funding for it is included in the upcoming budget.
The RET review said it was discounted because it was “just an election commitment” and there was no policy detail behind it.
Mr Grimes said; “It is clear that the RET Review Report will protect the vested interests in the current electricity market.
“It is also clear that the RET Review Report will protect the vested interests in the current electricity market.
He added that instead of making customer benefits the key measure of a successful energy market, this review was set to side with big business, giving little or no weight to the benefits of solar for householders, business and the community.
Clearly any model that fails to consider a carbon price in any form up to 2030, in the face of international action on climate change, is negligent and lacks any credibility.
Ric Brazzale, managing director of Green Energy Trading, said it was “ridiculous to assume you can increase greenhouse emissions for decades with no kind of cost or risk at all”.
“They are not going to come up with a fair outcome if they assume there is no carbon price and no kind of carbon constraint at all,” Mr Brazzale said.
When it was launched the RET represented 20 per cent of the market, but due to falling electricity demand, it will now be well over 20 per cent, which has prompted calls for the target date to be pushed out or the target reduced.
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n setting up the RET review, the Liberal-National government bypassed the Climate Change Authority, which it is trying to abolish, but which is required by legislation to undertake regular reviews of the RET.
The review is charged with looking at “the economic, environmental and social impacts of the RET scheme, in particular the impacts on electricity prices, energy markets, the renewable energy sector, the manufacturing sector and Australian households” and with assessing how it fits with the government’s aim of “reducing business costs”.
