Renewable Energy Target review announced by Government will examine clean energy impact on power prices

Updated

A major review into the impact of clean energy on retail power prices is expected to clear the way for the Government to make significant changes to the Renewable Energy Target (RET).

The study of the RET will be headed by former Reserve Bank board member Dick Warburton and will report back to the Government by the middle of the year.

It will feed into the Energy White Paper process, and a senior Liberal has told the ABC it will provide the Government "cover" for "let's kill the RET".

Speaking after a meeting of Cabinet in Canberra, Environment Minister Greg Hunt and Industry Minister Ian Macfarlane said the review was always due to occur this year under legislation.

"There are no surprises," Mr Hunt said.

Mr Macfarlane said the actual cost of renewable energy needed to be made clear to householders paying their electricity bills every quarter.

"It will be an extensive review. It won't be a desktop audit. It will be a complete review," he said.

Industry and environmental groups knew this review was coming, the ABC's national environment reporter Jake Sturmer says:

The feeling from both sides is 'bring it on'.

The Renewable Energy Target was introduced in 2001 by then prime minister John Howard.

Its aim was to create an extra 9,500 gigawatt-hours (GWh) of power by 2020.

In 2009, the Labor government increased the figure to ensure renewable energy made up the equivalent of 20 per cent of Australia's electricity (41,000 GWh).

The Climate Change Authority (CCA) reviewed the policy in 2012.

It found the Government should keep its target, despite changing demand forecasts and some electricity generators saying it would drive the cost of power up by billions of dollars.

Given the CCA is in the process of being disbanded by the Government, it's now up to the expert panel to test those claims.

And according to the Clean Energy Council there's not a moment to waste – with $18 billion worth of investments claimed to be in the pipeline.

"One of the things we want to do with this review is establish the actual cost of renewable energy and of the other schemes that the states have put in place - there is at the moment a blurring of what costs what.

"The role of panel will be to clearly enunciate what renewable scheme is contributing how many dollars to each individual and each industry's bill.

"Renewable energy has a role to play and it's now time to look at where this scheme is going."

Mr Hunt said the terms of reference focused on measuring the progress of the RET in three ways – against the initial objective, in terms of investment certainty and the scheme's relationship to electricity prices.

"We are a government that is unashamedly doing our best to take pressure off manufacturing and households through anything that can lower electricity prices," he said.

Prime Minister Tony Abbott has faced strong internal pressure to scrap the renewable energy target from both the Nationals and many Liberals.

The Department of Environment says the RET scheme ensures 20 per cent of Australia's electricity will come from renewable sources, like wind and solar, by 2020.

The Liberal Member for the western Sydney seat of Reid, Craig Laundy, has openly questioned whether the public's support for renewable energy will be maintained once the cost is made clear.

Wonder how popular RET will be when people learn how much it's costing them? #RETreview — Craig Laundy (@LaundyCraigMP) February 17, 2014

The target would see 41,000 gigawatt-hours of renewable energy generated by the end of the decade.

Since January 2011, the scheme has been operating in two forms – the large-scale RET which creates financial incentives for clean energy power stations, and the small-scale renewable energy scheme which targets households and small business.

Business has warned it has distorted the price of electricity by contributing to an over-supply of electricity generation.

Mr Hunt said this review into the RET would be the last "for a very long time".

The Clean Energy Council's Kane Thornton has welcomed the review and is hopeful the findings will be positive.

"The Renewable Energy Target is working and should be left alone to do its job," he said.

But Labor frontbencher Anthony Albanese said the Government was preparing to break another promise.

"They made it very clear; Greg Hunt staked his reputation on the maintenance of the renewable energy target," he told reporters in Tasmania.

"It's important for jobs. It's important in terms of positioning Australia as a clean energy economy into the future.

"We'll wait and see what they do but we'll be holding them to account."

Greens Senator Sarah Hanson-Young says the Government is paving the way to undermine renewable energy.

"Now we have the Prime Minister doing everything he can to get rid of the RET," she said.

"Thankfully we still have the Greens in the Senate and we'll be doing everything we can to stop the removal of the RET in the Parliament."



Topics: climate-change, environment, government-and-politics, federal-government, alternative-energy, energy, electricity-energy-and-utilities, australia

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