Federal industry minister Ian Macfarlane has rejected the offer of a compromise on the Renewable Energy Target from the Clean Energy Council, saying his government would not budge above 32,000GWh.
“We are not conisering anything over 32,000GWh,” he told ABC Radio.
The CEC, Australia’s peak renewables body, proposed a “compromise” RET at 33,500GWh, down from the current target of 41,000GWh, in a letter to the government and Labor on Wednesday.
The suggested target is half way between the government’s “take it or leave it” offer of 32,000GWh, and Labor’s bottom line of 35,000GWh, and represents a cut of around one third of the outstanding target.
The letter was sent by CEC chief executive Kane Thornton, most likely under pressure from major wind energy players who are keen to see any sort of deal achieved in the hope that it can unblock the deadlock that has seen investment in large scale renewables virtually dry up in the past 18 months.
However, it will likely anger and frustrate developers of large-scale solar, who believe that the reduced target will now largely be met by shovel-ready wind energy projects.
Large-scale solar – which some analysts had forecast would make up one half of the target had it remained at the original 41,000GWh – will now find itself marginalised, although a number of smaller projects could get the go-ahead, depending on financing and the structure of the deals.
The CEC recognises that an abridged target would “impact diversity”, and so asks that the government desist in its attempts to close the Clean Energy Finance Corporation and the Australian Renewable Energy Agency, which are key to ushering in new technologies such as solar and storage.
Indeed, it is believed some solar developers proposed reserving – or banding” some part of the RET for large-scale solar developments, but this was fiercely resisted by the wind energy industry.
The compromise deal caught some by surprise, given the rejection of the 32,000GWh offer by the Abbott government on Monday, but others said there were some hints that the CEC was looking to break the deadlock, and did not want to risk the potential impact of another six months of uncertainty.
The Greens said the industry should have stood together and held firm, adding that a lower target would lock in lower investment, fewer jobs, and a smaller cut to carbon pollution.
“If the government wants to fix uncertainty in the renewable energy industry, they can do it today. All it takes is for Mr Abbott to back off his cut to the RET, the way he’s backed down on Medicare and university fees,” said leader Christine Milne.
“The RET was working brilliantly, rolling out investment and jobs, especially in rural Australia, and along came Tony Abbott. He realised renewable energy is undermining the profits of the coal fired generators so he went out to smash it.
“He’s smashed the Renewable Energy Target and now he’s going to everyone from Labor to the crossbench to the industry, pressuring them to fix it.”
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