Australian Renewable Energy Target (RET) – in principle agreement reached on a revised RET
After months of negotiations, Industry Minister Ian Macfarlane has confirmed that on 8 May 2015 the Australian Government and the Opposition have agreed in principle a revised Renewable Energy Target (RET) of 33,000 gigawatt-hours (GWh) of large scale renewable energy by 2020.
This is a reduction from the existing target of 41,000 GWh of large scale renewable energy by 2020. The target was intended to represent an equivalent of 20% of Australia’s electricity being comprised of renewable energy. The Government has held the view that the target of 41,000 GWh would overreach the 20% goal due to falling energy demand.
There has been significant uncertainty within the renewable energy industry since 2013 when speculation began that the Government would reduce the RET or remove it entirely. The renewable energy industry considers that the Government’s protracted review of the RET (which has continued for more than 14 months) has frozen investment in major projects and has led to a crisis for the industry, as investors have not had the confidence to fund new renewable energy investment while the RET has been under review.
While the renewable energy industry is expected to reluctantly accept the revised RET, there are still concerns over the Government’s plans to:
- include native forest wood waste in the range of energy sources that could contribute to the RET, especially as the Opposition has expressed its disappointment with this inclusion; and
- retain the two-yearly reviews of the scheme, given that these reviews are arguably the predominant cause of the investment freeze.
These issues are yet to be finally resolved. The Government has stated that while it will be relying on the Opposition’s support to carry the bulk of the legislative amendments, including the revised RET of 33,000 GWh, it expects that the crossbench would support its proposal to include native forest wood waste.
No changes are proposed to the small-scale scheme which supports small-scale projects such as rooftop solar.