'Great majority' of Liberals want RET changed

Senator Dean Smith, chair of the Coalition's backbench committee on energy issues, has told The Australian newspaper the "great majority" of Liberals were in favour of significant change to the Renewable Energy Target scheme.

The report cited backbenchers Craig Laundy and Angus Taylor as among those supporting reductions in the level of the target, with Taylor telling the newspaper that: "Fixing the RET is just another step towards ending the age of entitlement -- wind industry entitlement."

The Australian said a group of 18 MPs were planning to write to Environment Minister Greg Hunt and Industry Minister Ian Macfarlane to press for a scaling back of the scheme to allow energy-intensive industries, such as aluminium, to be exempt.

The report comes as big business steps up its campaign to have the RET watered down. The Australian newspaper cites a yet-to-be released study commissioned by the Business Council of Australia and the Australian Chamber of Commerce and Industry claiming that the RET will lead to the loss of 4900 full-time jobs by 2020, which it attributes to the ripple effects of the scheme increasing electricity prices.

This study, by macro-economics group Deloitte Access Economics, may have missed micro-economic factors in the electricity market, which suggest the RET will potentially depress retail electricity prices rather than increase them.

Modelling by specialist energy market analysts including ROAM Consulting, Sinclair Knight Merz, and Schneider Electric indicates that addition of renewable energy supply induced by the RET acts to significantly reduce prices in the wholesale electricity market below new gas power entrant costs due to an oversupply of generating capacity.

According to these studies, this price reduction across the entire electricity market largely, or even entirely, offsets the extra subsidy cost for the less than 20 per cent of power supported via the RET.