Australian report urges end to renewable energy target

by Reuters
Thursday, 28 August 2014 09:00 GMT

David Brockwell walks between wind turbines during a routine inspection at the Infigen Energy wind farm located on the hills surrounding Lake George, 50 km north of the Australian capital city of Canberra, on May 13, 2013. REUTERS/David Gray

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An Abbott-administration report effectively recommends ending efforts to get 20 pct of electricity from renewables

By Matt Siegel

SYDNEY, Aug 28 (Reuters) - A long-awaited report commissioned by conservative Australian Prime Minister Tony Abbott has effectively recommended ending a scheme under which 20 per cent of the country's electricity would come from renewable sources by 2020.

The Renewable Energy Target Review released on Thursday argues the scheme was not cost effective and had outgrown the economic environment in which it had been written. The review included a number of suggestions to severely curtail the aims of the renewables targets.

"With the renewables industry now established in Australia, the main rationale for the RET hinges on its capacity to contribute towards the Government's emissions reductions target in a cost effective manner," the report said.

"In the presence of lower cost alternatives, the costs imposed by the RET are not justifiable."

The report was immediately blasted by the opposition Greens Party and environmental groups, who said it was a sop to polluters and another step back for the environment after the repeal of the country's carbon tax in July.

"The Renewable Energy Target is cutting pollution, rolling out investment, creating jobs and will bring power bills down," Greens Party Senator Christine Milne said in a statement. "Why on earth would we get rid of it?"

Australia scrapped the country's carbon tax and plans for emissions trading last month, a major victory for Abbott that opponents said left it uncertain how the country would meet its carbon reduction goals.

Australia is one of the world's biggest carbon emitters on a per capita basis and abandoning plans for what would have been the world's third largest emissions trading scheme (ETS) after Europe and China's Guangdong emissions market was a major setback for global CO2 trading.

Australia has committed unconditionally to reducing its overall emissions by 5 per cent compared with 2000 levels by 2020, but some now doubt it will be able to do that.

"The review panel has clearly misunderstood the devastating effect of many of its recommendations," Clean Energy Council Acting Chief Executive Kane Thornton said in a statement.

Abolition of the carbon tax was a centrepiece policy of Abbott's 2013 election, but his Liberal-National coalition struggled to repeal the legislation without control of the upper house Senate.

The repeal of the carbon tax only passed the upper house with the support of mining magnate Clive Palmer's Palmer United Palmer (PUP), which holds the balance of power in the senate.

Given that Palmer is opposed to the repeal of the renewables target scheme, the government's plans to do so remain in limbo.

The Australian Aluminium Council said in a release it welcomed the review, which it said accounted for changes in the market since the introduction and subsequent expansion of the scheme.

"Ultimately, the aluminium industry is unable to continue to subsidise renewable energy generators and therefore we will be pursuing a full exemption from the burden of the RET for aluminium smelting and reduced RET costs for alumina refining," Miles Prosser, the Council's Executive Director said. (Reporting by Matt Siegel; Editing by Tom Hogue)

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