AGL’s submission to RET review urges incentive reductions

by Giles Parkinson on 21 May, 2014

in Solar and Renewable Energy Policy,Solar Choice News,Federal Government solar incentives

Leading Australian utility AGL Energy has been accused of joining the electricity sector “dark side” after it called for the small-scale component of the Renewable Energy Target, currently under review by the Abbott government, to be scrapped altogether.

In a brief submission to the Coalition’s RET review panel, AGL effectively called for the end of federal government support for rooftop solar, as well as suggesting the Large-scale Renewable Energy Target (LRET) be diluted or deferred, arguing it was impossible to meet the 41,000GWh target in the current timeframe.

“Household solar PV now no longer requires subsidies to be an attractive proposition for households,” AGL said in the submission, putting the company once considered to be the ‘greenest’ of the major utilities in step with its fellow incumbent generators, retailers and network operators, in a near unanimous vote for rooftop solar support to be ceased.

The target for small-scale energy is currently uncapped, but AGL argues that production from rooftop solar – which now amounts to 3.2GW across 1.3 million households, amounting to one of the biggest threats to the gentailers’ business models – has already exceeded its “original policy intent” of 4,000GWh.

It also alleges that rooftop solar received subsidies equivalent to “75 years of generation” – a reference to the “solar multiplier” that was used when the cost of rooftop solar was higher.

AGL blames a combination of policy uncertainty – which, ironically, most in the industry recognise has been caused by the current RET review – as one of the major reasons why the large-scale target cannot be met.

AGL also repeated its calls for compensation to help coal-fired generation to be permanently removed from the market, rather than just mothballed. It has previously cited the need to help with costs of “remediation” in closing coal-fired generators.

It also wants new market mechanisms such as “capacity” markets – which allow for extra payments to be made for baseload or “dispatchable generation”. This is a subject of fierce debate in European markets.

AGL Energy is the largest single investor in renewable energy in Australia, and its outgoing managing director Michael Fraser used to be the chairman of the Clean Energy Council.

However, a series of major fossil fuel investments, including the purchase of the Loy Yang A brown coal generator in Victoria, and the proposed purchase of 4.6GW of black coal through the purchase (so far rejected) of Macquarie Generation in NSW, would mean that its revenues would be leveraged towards fossil fuels over renewables by a factor of around 12:1.

© 2014 Solar Choice Pty Ltd

Giles Parkinson

Giles Parkinson

Giles Parkinson regularly contributes unique content to Solar Choice News. Giles is the founder and editor of clean energy industry news service RenewEconomy. He is a journalist of 30 years experience, a former Business Editor and Deputy Editor of the Financial Review, a columnist for The Bulletin magazine and The Australian, and the founding editor of Climate Spectator.
Giles Parkinson

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