Australia: attempts to cut Renewable Energy Target hit another barrier

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Since coming to power in September 2013 the Australian Federal Government, lead by Prime Minister Tony Abbott has been on the offensive against renewables. The Abbott government has advocated watering down the country’s RET, the mechanism by which large and small scale renewable projects are supported.

After seeing no chance of its legislation being passed through the Senate, after the Labor Opposition and key minor parties supported the RET, the Abbott government turned to Labor in an attempt to find a compromise on RET cuts and pass its legislation. It now appears the attempt at compromise has failed, presenting somewhat of a lifeline to the renewable sector.

The Guardian reports that the Labor environment spokesman, Mark Butler delivered a letter to the government’s Industry Minister Ian Macfarlane on Tuesday saying that his party would not accept the cuts to the RET as they were proposed. In the letter Butler wrote that Labor did not see, “any value in continuing discussions at this point in… time.”

The RET mandates 41,000 GWh of electricity be sourced from renewables by 2020. The government had proposed cutting this to 26,00 GWh. According to reporting from The Guardian, Labor was willing to negotiate a reduced figure in the mid to high 30,000 GWh, but this was rejected by the government.

The Guardian notes that the delivery of the letter by Labor is likely timed to embarrass the government ahead of the G20 meeting set to get underway in Brisbane later this week.

Australian Solar Council (ASC) lauds move

Australia’s peak solar body, the ASC congratulated the Labor opposition on the move saying that changes to the RET are now impossible. ASC’s John Grimes said that despite government comments that rooftop solar was safe in the negotiations with the opposition, that was far from the case.

“Tony Abbott will not be able to deliver the big win to the fossil fuel industry and big power companies that he dearly wanted,” said Grimes in a statement. "The Abbott Government remained intent on targeting rooftop solar in the Small-Scale Renewable Energy Scheme (SRES). The plan was to cap the SRES (leading to an annual boom and bust cycle), rapidly phase out the scheme, and lower the threshold from 100 kW to 10 kW, all of which would decimate the solar industry, and lock Australians into higher power bills.”

Lowering the SRES threshold from 100 kW to 10 kW would have particularly devastating to the commercial rooftop space.

The SRES is, in effect, a subsidy in support of rooftop solar arrays. It is worth around $750/kW (US$653). The average rooftop solar array in Australia is between 3.5kW and 4.5kW, meaning the average subsidy is around $3,000 (US$2,612).

While residential and commercial rooftop PV demand has remained strong since the election of the Abbott government, investment in utility scale solar has dropped away. While currently a number of projects are being built out, and some being supported on a regional level such as in the Australian Capital Territory, few new projects are being developed.

Australia’s Climate Council released a report this week in which is found investment in renewable energy, despite the strong rooftop PV segment, has dropped 70% this year compared with 2013 figures.

The Australian Solar Council has vowed to continue its, to date, highly effective campaign in support of the sector. The Save Solar campaign has targeted marginal electorates, in an attempt to spook government members and to demonstrate public support for solar and renewables.

“Today we announce our extraordinarily successful Save Solar campaign now turns into an election campaign,” said the ASC’s Grimes. “We will forge smart alliances and bring together disparate organizations under the Save Solar banner. Tony Abbott – it seems nothing will change your anti-solar crusade. Ultimately the community will decide.”

The latest IHS forecasts show that Australia is set to install 800 MW of solar in 2014, with that dropping to 700 MW in 2015.