Industrialist Dick Warburton will head review whose terms of reference focus heavily on impact of RET on power prices

This article is more than 6 years old

This article is more than 6 years old

The Abbott government has appointed a self-professed climate sceptic to head an “extensive” review of the renewable energy target.



Dick Warburton, a veteran industrialist and current chairman of the Westfield Retail Trust, described his views on climate science in a 2011 interview on ABC.

“Well I am a sceptic. I’ve never moved away from that. I’ve always believed sceptical,’’ he said. “But a sceptic is a different person than a denier. I say the science is not settled. I’m not saying it’s wrong. I’ve never said it’s wrong, but I don’t believe it’s settled.”

Among those joining Warburton on the long-promised review is Dr Brian Fisher, former head of the agricultural research bureau ABARES and a leading climate change modeller who repeatedly warned about the potential economic impacts of the carbon tax before it was legislated.

As flagged by the prime minister, Tony Abbott, the review’s terms of reference focus heavily on the impact of the RET on power prices, but also include the need for investment certainty for the renewables industry.

It is charged with looking at “the economic, environmental and social impacts of the RET scheme, in particular the impacts on electricity prices, energy markets, the renewable energy sector, the manufacturing sector and Australian households” and with assessing how it fits with the government’s aim of “reducing business costs”.

The target – introduced by the Howard government and expanded by the Rudd government – now requires that 45,000 gigawatt hours of energy be sourced from renewables by 2020.

At the time it was enacted that represented 20% of the market, but due to falling electricity demand, it will now be well over 20% – which has prompted calls for the target date be pushed out or the target reduced, including a plan privately floated by the environment minister, Greg Hunt, for it to become a 25% by 2025 target.

But others, including the government’s top business adviser, Maurice Newman, want the RET scrapped altogether.

Newman, the former chairman of the ABC and the ASX, has said persisting with government subsidies for renewable energy represented a “crime against the people” because higher energy costs hit poorer households the hardest and there was no longer any logical reason to have them.

Asked whether scrapping the RET was an option for the government, the industry minister, Ian Macfarlane, said the review would be “extensive, it is not a desktop audit … it will be a complete review, and when the review comes back we’ll have a better idea of where it sits going forward.” He said the review would unpick the costs of the RET from other schemes imposed by state governments.

But Hunt said the government wanted to “encourage the development of the renewable energy industry and we want to do that in an environment that gives certainty and long-term stability … it is an industry that has contributed to Australia … and a very productive sector.”

Hunt said the RET was “complimentary” to his Direct Action plan to reduce greenhouse emissions without a carbon tax.

Warburton was also one of three experts from whom Macfarlane sought advice about providing assistance to SPC Ardmona and who are understood to have recommended some federal funding be provided, a recommendation cabinet rejected.

The other review members are Shirley In’t Veld, former boss of Verve Energy, and Matthew Zema, chief executive of the Australian Energy Markers Operator. It will take submissions from industry and the public and have a secretariat in the Department of Prime Minister and Cabinet and must report by mid year.

Abbott signalled before Christmas the target could be wound back or the scheme scrapped, suggesting lower power prices are the government’s primary goal and the rationale for the RET no longer exists.

According to the Australian Energy Market Commission, in 2013-14 the RET was responsible for around 4% of the average household bill, falling to a likely 3.1% in 2014-15.

Other estimates, from the New South Wales Independent Pricing and Regulatory Tribunal and the Queensland Competition Authority, fall within a range of between 3 and 5% of retail electricity bills.

The Clean Energy Council said the review would give it a chance to demonstrate the huge benefits of the target, and “debunk” misleading claims from critics.

“The clean energy industry is keen to show the huge positive impact of a stable target, delivering 41,000 gigawatt hours of large-scale renewable energy and millions more solar households and businesses by 2020,” said its chief executive, David Green.

The Climate Institute said the review should focus on the original objective of the policy – to reduce emissions from the power sector.



“Australia’s power sector emissions are among the highest in the world. Reducing emissions brings economic and environmental benefits and these must be clearly examined or the outcomes of the review will lack balance and credibility,” said the institute’s chief executive John Connor.

He said under current settings, the RET would deliver 76m tonnes of emission reductions – or about 18% of Australia’s 5% emission reduction target - by 2020.

The solar industry was also concerned by the detail of the review.

“The government has said everything is on the table in reviewing the renewable energy target. That means abolishing (it) is on the table,” said John Grimes, chief executive of the Australian Solar Council. “Recent research shows 8,000 jobs could be lost if the renewable energy target is axed.”