Economic modelling for the review of Australia’s Renewable Energy Target (RET) reveals that keeping the clean energy scheme would result in lower household bills over the longer term.
However, the modelling also shows that between 2015 and 2020 prices would be higher.
Australia’s requirement that renewable energy sources produce at least 20 per cent of the nation’s power by 2020 is currently being reviewed by an expert panel, commissioned by the conservative Liberal-National government.
Modelling done for the review by ACIL Allen predicts that repealing the RET would sacrifice around $16 billion in new wind investment and around $2 billion in solar.
At the same time much of the modelling has been strongly criticised by the industry lobby group the Australian Solar Council (ASC).
CEO of ASC John Grimes said it had applied significant pressure from the outset to ensure that the wholesale cost reductions to consumers of renewable energy were modelled in this process.
Mr Grimes said despite prejudicing every assumption in the model against renewable energy the stunning admission from the modellers was that the more renewable energy deployed the cheaper electricity became for all customers, and the less renewable energy you deploy the more expensive electricity became.
He added; “This shows that the assertion that renewable energy pushes up electricity prices is a lie.”
ACIL Allen’s modelling is similar to the findings of financial analysts Bloomberg New Energy Finance (BNEF), which warned the government in May that if it scraps Australia’s RET it could cost thousands of jobs and billions of dollars in potential investment.
The BNEF report suggests that renewable energy sources contribute to cheaper wholesale electricity prices.
The RET review is being led by Dick Warburton, who has said he is sceptical about human-induced global warming but is not a climate change denier.
Meanwhile, new figures from the renewable energy sector show almost 3000 jobs were lost in the past year.
The Clean Energy Council’s annual report has shown the number of people employed by the renewable energy industry has fallen from 24,300 to 21,400.
At the same time it found the share of renewable energy in 2013 increased to 14.76 per cent, up from 13.14 per cent in 2012.
The industry figures show the amount invested in the sector has increased by almost $1 billion to $5.2 billion.
Clean Energy Council deputy chief executive Kane Thornton said that was likely to be put on hold.
“Certainly 2014 is proving to be a challenging year for the industry with a lot of uncertainty around the policy settings and in particular the review of the renewable energy target which is seeing investment certainly go on hold and is likely to see lower investment numbers into 2014,” he said.
