Climate Change Authority chief recommends maintaining RET but extending timeframe

The chairman of the Climate Change Authority has weighed in on the debate over Australia’s Renewable Energy Target, arguing it should be kept at its current level, but extended over a longer time frame.

Bernie Fraser, who before heading up the CCA was chairman of the Reserve Bank of Australia, has suggested the Target be maintained at 41,000GWh, but be given more time to be met.

Fraser, speaking on ABC Radio National’s Breakfast program, also suggested that the Abbott government use funds from its Direct Action policy to help the owners of Australia’s old and inefficient coal fired generators close them down.

The Climate Change Authority, which the Abbott government recently tried to abolish, has been sidelined from the latest review of Australia’s Renewable Energy Target – formerly its statutory duty – the federal government choosing instead to create a panel led by climate denier Dick Warburton.

Fraser said it was clear that the latest review of the RET, had not taken the long-term implications of climate change into account, focusing instead on “short term” issues about over-capacity and its adverse impact on coal fired generators.

Fraser said one solution could be to retain the 41,000GWh target – but could allow more time to meet it rather than the current deadline of 2020. This, he said, would provide confidence to developers and to financiers.

Interestingly, this is the same compromise deal that leading players in the renewable energy industry tried to take to leading utilities last year.

That offer was knocked back, however, when the utilities sensed that the Abbott government could be persuaded to either close the target to new entrants, or to scale it back significantly –  the two key recommendations of the Warburton Review.

Fraser’s suggestion is also the preferred position of the NSW Coalition government, which has argued that the 41,000GWh target be kept, but the timing adjusted to cater for surplus market capacity issues.

“Renewables will become much more prominent in the mix of sources of generation,” Fraser said in the ABC interview. “That is pretty clear to everybody.”

Delivering a few extra years to meet the target (he did not suggest a new timeframe) would give fossil fuel generators adapt to those trends.

In the meantime, funds from Direct Action could be deployed to help the oldest, dirtiest and least efficient coal fired generators to exit the market permanently. Some 3,000MW of fossil fuel capacity has been mothballed, but little closed completely because of the high remediation costs.

Fraser said if part of the funding of Direct Acton were to be made available to facilitate such exits “ that would be a meaningful use of direct action.” Such a move would still be controversial, given that in the world’s biggest energy markets, China and US, old coal generators are being forced out of the market by regulation and tight emission standards, rather than government handouts.

Fraser said the threat of repeal had been “devastating” to the CCA staff, but it retained a “core” competence that could provide a useful role in solving the political impasse over renewables.

The Abbott government has signaled that it was looking for “bipartisan” support from Labor – given that any plans to change the RET would be blocked in the Senate by the minor parties.

The Climate Institute seized upon Fraser’s remarks, saying that a bipartisan approach to decarbonising Australia’s electricity sector with a goal of at least a 50 per cent cleaner power supply by 2030 needs to be central to discussions around the Renewable Energy Target. “Both major parties accept the international goal of working to avoid 2°C warming but neither has yet accepted that this requires a longer term decarbonisaton goal,” said Erwin Jackson, Deputy CEO of The Climate Institute.

“Australia’s energy policy debate has been in a stalemate with a short-term fixation to 2020, when all parties should look much further ahead.”

Top image: CCA chief Bernie Fraser, via www.climatechangeauthority.gov.au

© 2014 Solar Choice Pty Ltd

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