Corporate call for Clive Palmer to retreat on Renewable Energy Target
25 July 2014
CLIVE Palmer faces pressure to allow changes to the Renewable Energy Target after business groups released modelling showing the existing scheme will drive up power prices by $49 a year per household over the next decade and cost the economy $28 billion.
Australian Chamber of Commerce and Industry chief executive Kate Carnell said she would seek to meet Mr Palmer to press for a reversal of his vow not to allow any changes to the RET before 2016.
The Deloitte Access Economics modelling commissioned by ACCI, the Business Council of Australia and the Minerals Council of Australia finds that, because of lower demand for electricity, the RET, if unchanged, will reach 28 per cent by 2020 instead of the intended 20 per cent when the legislation was written.
Ms Carnell said ACCI would push Mr Palmer to agree to a “true 20 per cent’’ to take pressure off power prices and increase economic activity.
The modelling, which also mounts a case for the abolition of subsidies for rooftop solar panels, finds the current scheme is an expensive form of carbon abatement at $103 a tonne compared with the just-abolished carbon price of $25.40. It also shows if unchanged the scheme would cost 5000 jobs.
The continued rise in power prices for households compares with modelling by ACIL Allen for the RET review, headed by businessman Dick Warburton, which predicted electricity prices would fall after 2020 if the RET remained unchanged.
Mr Palmer vowed to oppose any changes to the RET after meeting former US vice-president Al Gore last month in Canberra. The move sparked a 33 per cent rise in the cost of renewable energy certificates on speculation there would be no change.
With widespread Coalition backbench support to modify the scheme to a “true 20 per cent’’ target, Ms Carnell said ACCI would accept the change as a compromise. “We believe at the very least it needs to change significantly. In its current form, the RET is expensive to the economy, costs jobs and puts power prices up.’’
The Deloitte Access Economics modelling found the share of renewables in the system was already 17 per cent. It found reducing the RET to a “true’’ 20 per cent could cut between $21 and $36 a year from household power bills compared to no change.
The “true 20 per cent’’ would also reduce the cost to the economy to $14bn compared with $28bn if there was no change. The jobs impact would also be halved to 2419 under a true 20 per cent from 5049 under no change.
The cost of abatement would also fall from $103 to $70 a tonne.
Clean Energy Council policy director Russell Marsh dismissed the modelling, which he said had used out of date figures and differed from five other studies which showed the RET would be cheaper for consumers in the long run.
“If they were serious about reducing power bills for business, these groups would be looking at the network costs that have driven the majority of power prices rises over the last five years, not tinkering around the edges with a policy that makes up about 3 per cent of power bills,’’ Mr Marsh said.
You’ve got to love Rusty Marsh!
Rusty might like to explain why it is that Australia’s wind power capital, South Australia, has the greatest installed wind power capacity in the nation and the highest retail power prices in the world? Mere coincidence, perhaps? (see our posts here and here).
And next time Rusty starts waffling about power prices and “poles and wires” he just might should direct his attention to the cost of duplicating the network simply to accommodate wind power (wind farms are located remotely from the markets for power and, if any further capacity is built, entirely new transmission lines will need to be built at a cost in the order of $30 billion – see our post here). As a taste of things to come, he should have a look at the $107 million upgrade to the Heywood interconnector for no other apparent purpose than to convey South Australian wind power to Victoria at night-time (see this article). Nice try Rusty, the big boys have stopped listening.
The only question is whether the mandatory RET gets walloped during the life of this Parliament; or whether it has to wait for the PUPs to be returned to their natural environments.
One thought on “Business Calls for RET Retreat to Save Real Jobs”
Australia with one third of one percent of the World’s population, with acknowledged cleanest Air in the World, living in the Southern Hemisphere which has only ten percent of the World’s population with virtually no heavy industry and with the air from the southern Hemisphere not mixing with the air in the Northern Hemisphere it will not matter one iota if we have no reduction full stop. What are we, fools? Please don’t answer that.