Renewable Energy Target changes



Renewable energy

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Changes to the Government’s Renewable Energy Target scheme, announced last week, have been welcomed by green groups and industry as a step in the right direction to achieving Australia’s 2020 renewable energy target.

From 1 January 2011 the Renewable Energy Target (RET), which guarantees 20 per cent of Australia’s energy in 2020 will come from renewable sources, will include two parts - the Small-scale Renewable Energy Scheme (SRES) and the Large-scale Renewable Energy Target (LRET).

The changes have been made in order to address an emerging problem with the previous, single RET scheme, where Renewable Energy Certificates (REC’s) generated by small scale technologies were flooding the market and devaluing the REC price - impacting the viability of large-scale renewable energy projects.

The new LRET will cover large-scale renewable energy projects like wind farms and commercial solar, separating these projects from the small-scale renewable technologies used in households. Small-scale technologies, such as solar hot water systems, will be covered under the SRES, which will provide a fixed price of $40 per megawatt hour of electricity produced.

Under this fixed price, a Sydney household that installs a 1.5 kilowatt solar panel system in 2011 will benefit from an upfront subsidy of $6200.

These changes are designed to provide greater certainty for households, large-scale renewable energy projects and installers of small-scale renewable energy systems. Combined, the new LRET and SRES are expected to deliver more renewable energy than the original 20 per cent target and ensure we build the clean energy future Australia needs.

“The clean energy industry has been discussing structural design issues with the current Renewable Energy Target since late last year,” said Clean Energy Council chief executive Matthew Warren. “These changes clear the path for the clean energy industry to play its crucial role in driving down the cost of clean energy whilst cutting Australia’s greenhouse emissions."

The Rudd Government has listened carefully to industry advice and has acted decisively and effectively, said Greenpeace climate campaigner Julien Vincent.

“These changes mean that people will still be able to install small-scale solutions around the home and at the same time a green light is being given to wind and other technologies,” he said.

However, while the changes address some uncertainty in the current market, “we need to see more detail about how these changes will work,” said Australian Conservation Foundation climate change campaigner Owen Pascoe.

The Government will shortly release an industry consultation paper on the new RET arrangements and intends to legislate the changes in the Winter Sittings of Parliament. They will also continue to work with the states and territories on other issues being considered by the Council of Australian Governments’ Review of Specific RET Issues.

“The Rudd Government has got it right with this announcement,” Warren said. “This is good news for jobs and investment in the renewable energy industry."