Late last week the Government responded to the recommendations of the Climate Change Authority’s (CCA’s) about the Renewable Energy Target Review that was issues last year. The Government agreed with most of the recommendations, accepted three in principle and rejected three as well.
The Government agreed to maintain the Renewable Energy Target of at least 20% of Australia’s energy demands to come from renewables, such as solar and wind power, by 2020. A statement from Minister for Climate Change and Energy Efficiency Greg Combet’s office said, “Arguments to reduce or cap renewable energy at 20 per cent of generation in 2020 ignore the need to reduce the emissions-intensity of Australia’s electricity sector so that we remain competitive as the world moves to clean energy.”
Kane Thornton, Deputy Executive Officer of the Clean Energy Council said, “The Federal Government has acted to lock in current and future investments in Australian clean energy and Australian jobs, by leaving the nuts and bolts of the scheme in place.”
The one decision many in the solar industry are upset about is the fact that the Government has agreed to the phase out of the Small-scale Renewable Energy Scheme. This scheme helps households and small business install solar power by selling certificates over a 15 year deeming period. The deeming period will be reduced so that the creation of certificates will not be rewarded after 2030. Many in the industry fear that, as in the past, the start and end dates of reductions will be brought forward and fast-tracked. The Governments response stated, “The steady phase-out path from 2017 signals the expectation that less support will be needed in the future as technology costs decline and carbon prices rise, and also allows time for the industry to plan and prepare.”
The Government rejected that threshold for small-scale renewable be reduced to 10kW (from 100kW) saying that they did not see a significant increase in medium-scale installations to warranty the reduction. In addition, the effects of a reduction on the large-scale sector may cause its investors to have a lack of confidence. They also rejected the idea that the Clearing House should become a ‘deficit sales facility’ stating that it does not address the problem of the current backlog and requires complex changes. Lastly, they rejected that forest wood waste should be put back under the RET saying that it was removed to ensure that the RET did not provide an incentive for the burning of native forest wood waste for bio-energy, which could lead to unintended outcomes for biodiversity and the destruction of intact carbon stores.
The Queensland Competition Authority also released recommendations last week that have not been accepted well by those in the solar industry. Its final report into Queensland’s solar feed-in tariff recommends that the tariff offered by distributors be reduced to zero with an electricity retailer payment of 7.55 cents – on a voluntary basis.
The Clean Energy Council (CEC) described a “fair and reasonable” tariff of at least 11.9 cents as well as an electricity retailer payment. They are outraged by the recommendations and say that it is impractical to ask people to negotiate with their retailers and actually come out with a decent offer. A statement from the CEC said, “Individual households and small businesses are powerless compared with large electricity retailers. It is unrealistic to expect individual consumers to negotiate a fair deal with electricity companies.”
The CEC is also concerned about a bid to move solar households on to a different tariff that would return a more “cost-reflected fixed charge.” They reiterated that the Queensland Government once promised that “there will be no fixed charge of any sort on people using solar,” and hopes that they will remain true to their word.
The Clean Energy Council will be taking up these issues with the Government as they deliberate before issuing the response to the recommendations.