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Renewable Energy Target review: a 'case for change'

29 August, 2014

The Review of the Renewable Energy Target (released 29 August) confirms that the scheme represents a 'massive transfer of wealth' within the electricity market and makes a compelling case for substantial reform of the scheme, says the Minerals Council of Australia.

"The review underlines that the RET is simply an old fashioned industry subsidy, the cost of which is being borne by consumers and export and import-competing industries," said the council's Chief Executive, Brendan Pearson, in a statement.

"Unsustainable" scheme

"The Minerals Council of Australia welcomes the report's finding that the scheme is unsustainable. As a major user of energy, the minerals sector has consistently argued for substantial reform of the RET.

"The Panel has found the current RET would require a further $22 billion cross-subsidy to the renewables sector in net present value (NPV) terms over the remainder of the scheme (in addition to the $9.4 billion cross-subsidy provided from 2001 to 2013)," Pearson said.

"A decade ago, Australia's energy costs were among the lowest in the developed world. Misguided policy interventions including the RET, the carbon tax and green energy schemes have seen Australia surrender this advantage.

"As the Panel observes, the RET currently increases retail electricity bills for households by around four per cent, but for commercial and industrial consumers the effect is significantly greater, up to 11 per cent on average. In the minerals sector, the impact is even higher, accounting for as much as 15 per cent of energy costs.

No head starts to competitors

"Australia cannot simply afford to give competitor nations such a head start in global markets.

"The minerals sector has no problem participating in a debate about whether and how as a nation we want to promote the development of renewable energy.

"The minerals industry is actually a user of renewable energy and hopes that it will provide a solution to provision of competitively priced energy, especially in remote areas. And renewable energy depends on the minerals sector – after all, every wind turbine contains 250 tonnes of metallurgical coal.

"But the debate must be informed by the real costs of policy measures. The Review has highlighted the enormous scale of the costs, and made a compelling case for substantial reform," Pearson said.

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roger | Friday, August 29, 2014, 1:04 PM
and how much money was poured into the coal industry in the 50s to build power station, roads, freeways!!, towns, etc in the latrobe Valley. Not to mention the state paying for transmission lines etc. Renewables have to pay for all this stuff themselves.
Peter Saunders | Friday, August 29, 2014, 5:34 PM
Just recently came back from a bus tour of many European countries(mainly by bus) and was astonished at the amount of land dedicated to Solar power generation. Hundreds of acres of panels and quite a number of Wind Turbines too. Compared to travelling our own country where you see a few Wind turbines but very little Solar Generation. Could somebody explain why......we don't have more. Germany for example is turning away from Nuclear and going to Wind, Wave and Solar.....