The review of Australias Renewable Energy Target is expected to be handed down in the coming weeks. As it is headed by an anthropomorphic climate change skeptic along with traditional energy industry executives, it has been expected to recommend a diluting or outright removal of the RET. Now signs from Prime Minister Abbott and review head Dick Warburton are auguring very badly for the RETs outlook.
The RET underpins large scale PV development in Australia, mandating approximately 20% of Australias electricity to come from renewable sources by 2020. It also is the driver of the SREC scheme which incentivizes small-commercial and residential solar installations.
Bloomberg New Energy Finance has previously reported that large-scale solar investment has essentially stalled in the face of uncertainty regarding the RET. The recent withdrawal of Pacific Hydro from the Moree Solar Farm further points to this dynamic.
It now seems the Prime Minister Tony Abbott has already decided that the RET needs diluting. Speaking at an Australian Industry Group function last week, Abbott said that energy reform included some work on the Renewable Energy Target, as reported Australian renewables website RenewEconomy.
The Prime Ministers full comment was: While energy reform also involves repealing the carbon tax and some work with the Renewable Energy Target, it doesnt end there either, said Abbott. He also advocated exploiting Australias coal and gas reserves and exploring nuclear energy.
These statements strongly indicate that the Prime Minister already intends to reduce or do away with the RET, regardless of what his review committee decides.
Review also doesnt look good
Aside from what the Prime Minister intends to do, the RET review panel is also sending signs that it will recommend the target be reduced. The reviews Dick Warburton told Australian journalists that data from the Australian Energy Market Operator (AEMO), finding that Australia does not need any new generating capacity for 10 years, had been influential in its findings.
Warburton said that the AEMO data had formed, a very large part of the RET review panels findings.
Hope in the Senate
While all of this looks like the RETs days are numbered, and solars outlook in Australia diminished, there is hope in the form of an unruly Senate, which looks unlikely to pass government legislation regarding the RET.
The Labor opposition, Greens and the Palmer United Party (PUP) have all committed to supporting the RET and have the numbers in the Senate to block in any change. Renewable industry observer Tristan Edis adds that Prime Minister Abbott also has no mandate to pass a change of the RET, given his government had supported it in the lead up to the federal election last year.
A supposedly independent external review that is perceived by the public to be stacked by panel members to deliver a predetermined conclusion is likely to only feed scepticism and mistrust of the government, rather than build public support, wrote Edis today in Climate Spectator.
Given the Senate will not simply roll-over to his will, Abbott needs to find a way to build-up a broader coalition of support for his policy initiatives than simply his ideological supporter base.