March 2013: Labor says Australia’s renewable energy target will stay

 The Federal Labor Govt has made the decision to keep Australia’s renewable energy target. The target states a minimum 20% energy usage, or 41,000 gWh, will be generated by renewables by 2020.

See Combet interview below:

Minister for Climate Change and Energy Efficiency
Minister for Industry and Innovation
GC ###/13 21 March 2013
SUBJECT: Renewable Energy Target, Labor leadership, media reforms.

COMBET: This morning I am releasing the Government's response to the review of the
Renewable Energy Target that was carried out by the Climate Change Authority. So it is
available from this morning.
You will recall that the Climate Change Authority, which is chaired by Mr Bernie Fraser, former
Treasury Secretary and Reserve Bank Governor, was set up as part of the clean energy
package. And one of its first tasks was to review the Renewable Energy Target. It conducted
an extensive and very professional review including detailed modelling, a lot of consultation
with stakeholders across the renewable energy and other industries and particularly players in
the energy sector very broadly. It did a lot of detailed work and reported the Government in
December last year.
There were 34 recommendations made to the Government by the Climate Change Authority.
In the response that we have released today you will see that we have agreed with and will
implement 28 of those 34 recommendations. We have also agreed with three of the
recommendations in principle, and further stakeholder consultation will take place in relation
to them to investigate their workability. And we have rejected three of the recommendations.
The principal theme that runs through the Climate Change Authority's review of the
Renewable Energy Target is the importance of investment certainty. This is a Government that
of course established the Renewable Energy Target, legislated for it, and has been very
committed to it. It is a part of the Government's policy matrix in the clean energy area, in
tackling climate change, and it works very closely with the carbon price legislation. But this
Government is committed to the Renewable Energy Target and we understand the
importance of investment certainty that’s been a theme of the review carried out by the
Climate Change Authority.
For that reason in relation to the principal recommendation made by the Authority, and that
is the retention of the fixed 41,000 gigawatt hour (GWh) target, the Government has agreed
with it. The detailed modelling that the Climate Change Authority carried out showed that
were that target to be reduced, consistent with a level of 20 per cent of renewable energy on
current demand forecasts being delivered by the year 2020, that there would be a negligible
benefit for households in reducing the target and also an additional 119 million tonnes of
greenhouse gas emissions. So for purposes of investment certainty and on the basis of the
findings of the detailed work of the Climate Change Authority, the Government will not be
altering the fixed 41,000 GWh target.
I indicated earlier of course that it is a very important part of the overall climate change
policies that the Government has put in place. The Renewable Energy Target will work closely
with the carbon price in driving a lot of investment in renewable energy and we want to
assure investors in renewable energy that the Government is very supportive of the
investments that they are making and that they propose to make. All of our policies have
delivered a significant amount of investment in renewable energy in recent years including in
the small-scale area. We have now seen nearly a million installations of solar panels on
domestic rooftops in the time that the Government has been in power. In the period of the
Howard Government prior to that I think there were only five or 6000 installations.
So this is a Government very committed to renewable energy. We are going to remain
committed to it and it is in stark contrast to the Opposition whose position is a bit all over the
place but I think we can only conclude one thing – they don't support the current structure
and they would create tremendous uncertainty for investors in renewable energy. Mr Hunt
the shadow minister has been talking about having another review within six months if they
win the next election. That will create tremendous uncertainty. Mr Abbott has indicated he
doesn't look like renewable energy very much, Senator Boswell says it should be got rid of, the
star candidate in the seat of Hume that the Liberals have of course says that you've got to get
rid of it as well.
I don't think that players in the renewable energy sector can have much confidence in what
the Coalition is putting forward. They can certainly have a lot of confidence in what the
Government has put in place and that we stand by in relation to this sector and I'm happy to
take any questions you have got.
JOURNALIST: What are the recommendations you have rejected?
COMBET: There’s a couple of minor ones. One in relation to how the clearing house operates,
there's a couple in relation to that, and another one concerning a wood waste regulation that
was made as part of the MPCCC package.
JOURNALIST: Can you explain that more because I thought the CCA didn't make a decision
about how to handle bio, wood waste, that they had flicked it back to the Government?
COMBET: It did make a recommendation about it but we don't agree with it. That issue was
settled and we will stick with where it was settled.
JOURNALIST: So there is going to be no change there?
COMBET: No change on that front.
JOURNALIST: The target at the moment as I understand will actually overshoot. So can you
justify that given the investment climate?
COMBET: Yes. I mentioned before you arrived that of course some of the stakeholders have
said there should be a reduction in the fixed gigawatt hour target on the grounds that it is
likely to overshoot a 20 per cent equivalent by the year 2020. We have accepted the Climate
Change Authority’s recommendation to retain the fixed gigawatt hour target, even if that
does overshoot 20 per cent. This will guarantee at least 20 per cent of our electricity supply
comes from renewable energy by the year 2020. But the detailed modelling the Authority
carried out showed that even if you were to reduce the fixed gigawatt hour target there
would be negligible benefit for households and consumers from a cost point of view and it will
also lead to another 119 million tonnes of greenhouse gas emissions. There is not much merit
to playing with it at all. But I think the key consideration in relation to that, being the principal
issue in this report, is the issue of investment certainty. If you are an investor or a lender to
investors in the renewable energy sector you want some certainty about these policy settings
and that is what the Government is giving the sector.
JOURNALIST: Isn’t it a problem though that it is not the lowest cost abatement, the RET,
Treasury has calculated it is around $40 per tonne of carbon and households are paying for
that high cost abatement through their energy bills.
COMBET: Well we don't apologise for having a Renewable Energy Target, I make that
absolutely clear. We are very committed to it and the response to this report makes that clear
once again. But we have legislated of course in the form of the carbon price the lowest cost
method of abating of greenhouse gas emissions in our economy. It is already driving change, it
has already contributed to an 8.6 per cent fall in emissions in the first six months of the period
of the operation of the carbon price. And the two policy measures work very closely together.
We have a very emissions-intensive economy. We have got a major task ahead of us to reduce
its emissions intensity and these two policy levers I think work well together at reasonable
cost to the economy to try and drive the change that we need, to cut emissions and to
improve the emissions intensity of key industries, in particular the electricity generating
JOURNALIST: How do you respond to Grant King who said this week that it wasn't the carbon
price that is driving abatement it was in fact the closure of aluminium smelters and
manufacturers due to the high cost of doing business in Australia which is contributed to by
the RET?
COMBET: Well that is not supported by the evidence available. I think Mr King would
acknowledge he might have got a couple of things wrong in the presentation that he made,
but I note his comments. I would also say that you have got to remember that companies
argue their book. It wasn't that long ago that Mr King was putting propositions to Government
that involved an increase in the Renewable Energy Target because he saw good opportunities
for investment in that area. They are now major investors in the liquefied natural gas projects
going on up in Gladstone and he has a different view of on behalf of his company. That is
entirely legitimate, I make no criticism, but you have always got to bear in mind that
companies are arguing their commercial interest. What the Government does is act in the
national interest and we are very firmly committed to the Renewable Energy Target where it
is. We have accepted the key recommendations of the Authority for the purpose of
investment certainty and the other reasons that I outlined and we have legislated a carbon
price. We need to come back to the basic issues here. This Government respects the climate
science, we need to reduce greenhouse gas emissions, we have got to play our part
internationally. The Renewable Energy Target, the carbon price and other measures like the
Clean Energy Finance Corporation are absolutely key to achieving the goals we have set.
JOURNALIST: I've been reading this week a submission from China that talks about studying
linking ETS's, which they are talking about setting up national ones by about 2016, would you
like to comment because I think it is the first time I have read or understood that China really
is looking at a global, joining a global ETS.
COMBET: Well I've been talking about it for some period of time so I appreciate your doing
some reading. I am sure you do. Next week my counterpart from China will be in Australia and
we will have our annual dialogue. As a consequence of that dialogue in recent years we have
had a lot of exchanges of officials between Australia and China, going between both countries
with an important focus on the design of market mechanisms to reduce greenhouse gas
emissions and specifically the design of emissions trading schemes. I believe that that work
has helped contribute to the document that the Chinese released last week. It is a 300 page
document about the emissions trading schemes they are proposing to implement. They are
serious about it. And next week we will discuss it much further. That has been done with a
clear commitment between the two countries that what we are working towards is to link our
carbon markets ultimately. We will have a similar dialogue with the Korean Government that
is implementing an ETS in 2015. I was in fact speaking with my counterpart in the United
States this morning on the telephone and of course a scheme has been established in
California and we have a dialogue with officials there. The argument put by Tony Abbott that
somehow or other no one else is doing anything is complete garbage like pretty much
everything else that he says. There is a lot going on internationally in this area. We are of
course linking with the European Union emissions trading scheme. This is the way that
internationally countries will work together to reduce greenhouse gas emissions.
JOURNALIST: The Authority also in its report modelled that electricity prices to households
would only be increased between one and 4 per cent, I believe was their estimates. Do you
feel that the Government is doing the best job it can to explain to the Australian people how
these prices are relatively modest and there are quite a lot of myths around the debate about
carbon pricing?
COMBET: Well we certainly do our best and I do my best to articulate the issues here. The
measures we have put in place, we have done so very carefully and after very detailed work
and with an eye to ensuring that it is at a minimum cost to the economy. It's a question really
you should put to Mr Abbott because the alternative policy proposition from the Opposition is
completely ridiculous and it is a high economic cost way to reduce greenhouse gas emissions
even if they were to implement it. The responsibility of Government is to try and minimise the
cost of adjustment to the economy. That is exactly what we have done. We have released a
lot of detailed modelling to that effect and you will recall of course that to assist consumers
and households around the country we are using around 60 per cent of the carbon price
revenue to cut taxes for low and middle income households, to increase the pension, to
increase other social security payments to assist people in making this adjustment. Millions of
people are in fact better.
JOURNALIST: Mr Combet on other issues have you been canvassed by anyone, any supporters
of Kevin Rudd about which way your allegiances lie?
COMBET: Well I don't discuss those matters in the broader community, those sorts of
discussions going on internally. There are plenty of other commentators around. They can fill
that space.
JOURNALIST: On the media law reform do you think proper process was observed with the
way those Bills are going through (inaudible)
COMBET: Yes I know that there has been a lot of debate about that but a lot of work has gone
into the media reforms that have been put before the Parliament. There has been
engagement with other parties in the Parliament about it. Two parts of it have come through
which will increase local content in our media services. I think that is a good thing and as I
understand it talks are continuing.
JOURNALIST: The leadership issue is the elephant in the room at the moment ...
COMBET: Seems to be running around a bit more broadly ...
JOURNALIST: Should Rudd backers canvassing the media, should they pull their heads in?
COMBET: I have made comments about all of that in the past and I can make the same
predictable comments now. However I think there is enough people running around talking
about it at the moment. I genuinely don't think there is much to be gained by me adding to it.
JOURNALIST: What do you think the public perception is of this disunity?
COMBET: Well it's not good of course.
JOURNALIST: If this disunity continues can you win the next election?
COMBET: I can't speculate about that, it is obviously a difficult issue for us to manage at the
moment but there is nothing to be gained by me adding to it.
JOURNALIST: Some of your colleagues are saying that people like Joel Fitzgibbon are being
disloyal for the comments that he made yesterday suggesting that colleagues had been
canvassing general support for a leadership change but weren’t counting numbers. Do you
think that Joel Fitzgibbon has been disloyal and if so do you think that he should resign from
the position as chief whip.
COMBET: I try and abide by a particular approach to these things and that is that I do not
background and I don't leak to journalists and I don't criticise my colleagues and go around
doing that in press conferences. I don't intend changing that now.
JOURNALIST: Can I ask you are you disappointed that the new Victorian Premier didn't
consider lifting the barrier to wind generation that they put in place?
COMBET: Will the Victorian Government by its actions since it was elected, under Ted Baillieu
originally, has inhibited investment in wind generation in south-west Victoria in particular.
And investors looking to invest in wind generation will look elsewhere to make their
investments. That’s costing Victoria investment and it is costing jobs. They need to really think
carefully about it because it is a large area for significant investment in the years to come, we
are expecting something in the order of $19 billion of investment in renewable energy and a
lot of that will be in wind. Why wouldn't you want a piece of that?