Deal on Renewable Energy Target reached in principle

(Transcript from SBS World News Radio)

The political deadlock over a Renewable Energy Target is all but broken, with the Coalition and Labor agreeing on a pared back goal with conditions.


The federal government and the opposition have agreed in principle to cut the target from a legislated 41,000 gigawatt hours to 33,000.

That ends months of uncertainty that has stalled clean energy investment and cost jobs.

Both parties will take the deal to their respective party rooms when parliament resumes next week, but Environment Minister Greg Hunt says he is confident.

Amanda Cavill reports.

(Click on the audio tab above to hear the full report)

The Renewable Energy Target is a target which requires one fifth of Australia’s energy use to be sourced from renewable energy by 2020.

It is designed to mandate the proportion of electricity generated from selected renewable sources.

The policy is based on taxing electricity users to subsidise selected renewable energy producers, who buy renewable energy certificates.

They can sell to other energy producers if they meet their set targets for renewable energy production.

The large-scale target was set at 41,000 gigawatt hours in 2008, when it was projected to be 20 per cent of demand in 2020.

However, electricity demand has fallen, instead of rising, leaving that target more likely to represent 27 per cent of demand.

And it is that figure that has been causing the problem.

But now the Coalition and opposition have agreed on a figure which will leave the target just above 23 per cent.

Environment Minister Greg Hunt says that is good news for Australia and for the renewable energy industry.

“My hope and my expectation is that the Renewable Energy Target issue will be resolved precisely as we said prior to the election. There would be a review. This was the policy. It was the process. This will lead to a renewable energy outcome of 23.5 per cent, approximately. So, not just 20 per cent renewable energy, but about 23.5 per cent. That’s a very significant basis. It will, in fact, be a challenge for the industry to achieve that outcome, but it will be over to them. I hope and expect that this can be settled now.”

Opposition environment spokesman Mark Butler says he, too, is confident a positive result will finally be achieved.

Mr Butler says he will know the exact result early next week.

“I think we’ve got now a position that is the basis for a serious discussion, the possibility to get investment started again, to get projects being built again here in Australia and more jobs created in a critical industry for the 21st century. We’ve got a proposition today based on 33,000 gigawatt hours and some other details to take back to a shadow Cabinet meeting and a caucus meeting that are scheduled for early next week, and we’ll then be in a position to go back to the Government.”

However, he says Labor will not support a last minute demand that wood waste burning emissions be included in the target.

He says the Opposition will vote against that part of the legislation when it comes before the parliament if the Government will not change its mind.

“The Government has also indicated that it wants to open the renewable energy scheme to include the burning of native wood waste, and we’ve indicated that we’re not going to agree to that. Now, at the end of the day, the Government’s going to have to make a decision about whether it is keen on getting a deal that starts investment, secures existing jobs and creates new jobs.”

But Industry Minister Ian Macfarlane says he is not concerned.

Mr Macfarlane says the inclusion of wood burning has long been the government’s position.

And he says he is confident of achieving an outcome, even if it involves crossbench support in the Senate.

“We’ve also asked, as we have through the negotiations, that wood waste be included in the Renewable Energy Target, and that’s an issue which we’re yet to agree on. But I’m confident that, one way or the other, we’ll resolve it. The main thing is that we’ll both, as in the Labor Party and also Greg and I will be taking to the Cabinet on Monday and to our party room on Tuesday, a proposal that we accept the 33,000 gigawatt hour target that has been agreed to between the two negotiating teams.”

The Government says, once an final agreement is reached, it hopes to have the legislation in parliament as soon as possible.