The new bill will cut new investment in renewables by around AUD$5 billion (US$3.45 billion), just as the world accelerates its investment in wind farms, with more than $US3.7 trillion to be spent on solar alone in the next two decades, and $US8 trillion overall, according to a new report by Bloomberg New Energy Finance.
The legislation, which also allows native wood waste to be burned and included in the target, and introduces a wind commissioner to deal with complaints from nearby residents, will likely cause a huge scramble as projects stalled in the investment drought over the past two years seek off-take agreements and financing.
While both the government and the Opposition and some industry groups hailed the passage of the bill as providing certainty it is only a thin veneer.
The opposition Labor-party environment spokesman Mark Butler baited the government saying that it was bad news for Prime Minister Tony Abbott because it meant those wind farms he finds so utterly offensive can start being built again, despite his best efforts to drive them from our shores.
The reality is that while the Coalition government has pledge no further review until 2020, it is just one vote short in the Senate from doing what it likes. With an election possible soon, and Labor struggling in the polls, that certainty may be short-lived
Abbott has made clear he would stop new wind farms if he could. Hence the sense of urgency among wind farm developers to get their projects through. Wind farms also face competition from large-scale solar projects.
Analysts such as BNEF suggest that more than one third of the RET may be allocated to big solar as its costs come down. Indeed, in a new report it predicts large scale solar capacity will outstrip that of wind by 2040.
But the Coalition government is keen to ensure that as much solar is built, and has pledged to boost the prospects of the technology by directing funds from the Clean Energy Finance Corp (an institution it wants to dismantle) and other measures detailed in this story.
The Coalition is pitching this as a victory for renewables, saying the industry would double and contribute 23.5% of Australias generation by 2020. Labor is saying it will be closer to 25%. Neither party has explained what justifies the reduction, apart from the need for certainty.
But the impact on large-scale investment is significant: instead of 8,500MW of capacity being built over the next five years, only around 5,500MW will be built. This will relieve some pressure on the earnings of fossil fuel generators, who pushed for these and even greater cuts.
Kane Thornton, head of the Clean Energy Council, said between 30 and 50 major renewable energy projects and hundreds of medium-sized projects would be built over the next five years.
While this has been a challenging process, and we are disappointed by the level of reduction of the target for large-scale renewable energy, the passage of this legislation provides the platform for a doubling of renewables over the next five years, Thornton said.
The Greens said the proposed wind regulations which come despite no medical evidence of health impacts would seek to seek to strangle the industry with red tape, while no controls were imposed on coal-fired generation and the legislation ill drive additional native forest logging and allow the burning of whole logs.
This cut is just the first step for Tony Abbott. He has made it clear he wants to R-E-D-U-C-E clean energy even further, Senator Waters said in a statement.
Environmental groups were not happy. Dan Spencer, media spokesperson for the Australian Youth Climate Coalition labelled it an absolute disgrace, Solar Citizens Claire ORourke described it as a shameful and outrageous setback for the industry, while Friends of the Earth said it would mean nearly 4,000 fewer jobs in the industry by 2020.
Mark Wakeham, from Environment Victoria, said the commitment to establish a wind farm commissioner is a new low point in climate and energy policy in Australia. And as pressure builds in the lead-up to UN Climate talks in Paris, the weakening of the RET and the removal of the carbon price consigns Australia to pariah state on climate change.
Wakeham also question why the Federal ALP squandered the opportunity to support the Victorian Governments plan to introduce a state renewable energy target. This would have lessened the impact of slashing the RET and ensured additional renewable energy projects proceeded in Victoria.
It is unclear why the Federal ALP did not support amendments to the RET that would have supported more renewable energy projects in Victoria. It is now up to the Victorian Government to find a different path to delivering a strong renewable energy target for the state.
The Australian Forests and Climate Alliance (AFCA) said: We are going back to using dirty medieval technology that pretends to be sustainable and clean. In reality it will undermine real renewables like solar and wind. It will produce more emissions than burning coal and cause immense loss of ecosystems, wildlife and our greatest carbon stores. Its hard to imagine a worse scenario.
This article originally appeared in RenewEconomy. It is republished with permission.