Renewable Energy Target

By Bruce Key, Wodonga Albury Towards Climate Health (WATCH)

Most of Australia’s electricity is produced by burning coal, a fuel that pollutes and contributes to climate change.  Some electricity is produced from fuels that are non-polluting and free, using wind turbines, hydro power stations or solar cells.  These free ‘fuels’ are being constantly replenished by nature so they are called renewable fuels, and hence we have renewable energy.

Studies have shown that between 80% and 90% of people prefer renewable energy.  This may have been in the mind of John Howard when he introduced the Renewable Energy Target in 2001.  The RET has been spectacularly successful.  For instance in July this year South Australia generated 43% of its total electricity from renewable sources.

At present it is claimed that the RET contributes significantly to the cost of electricity, and therefore it should be abandoned.  The federal government commissioned a Review Panel to look into the RET and report back with recommendations on what should be done.  The panel was chaired by well-known climate sceptic Dick Warburton.  (Never ask for advice unless you are sure what the advice will be).

The panel’s report was released on the 28 August 2014 and can easily be found on the web.  It is very interesting, especially when it discusses the effect the RET has on costs.  Surprisingly it concludes that the price of electricity will increase if the RET is abandoned.  To quote part of page 36:

“Lower wholesale prices outweigh the direct cost of certificates over the period 2020 to 2030, meaning that retail electricity prices over this period are lower with the RET in place.”


Despite this, the report recommends (surprise surprise) that the RET be scaled back.  A logical person might ask why the RET needs to be scaled back when it is encouraging large investments in renewable energy, creating jobs and cutting greenhouse gas emissions.   This question is especially relevant considering the cost of the RET to electricity consumers is very small at present and after 2020 it will not be a cost but a benefit.  The reason for this is that after 2020 the building of renewable infrastructure will largely cease, or will not need subsidies and we will thenenjoy the benefits of the extra renewable energy powered by free fuels.

The reason the Warburton Review wants to scale back the RET is simple.  It is adversely affecting the ability of the coal-fired generators to make a profit, and that is much more important than cutting emissions, reducing pollution, creating jobs or lowering the price for the benefit of consumers.