Government still looking to scrap RET rather than ‘compromise’ and weaken it: Financial Review

The Australian Financial Review, in a front-page article on the topic, says that the Prime Minister and his closest cohorts still harbour intentions of scrapping the Renewable Energy Target (RET) in its entirety rather ‘compromising’ and diluting the scheme. The Financial Review’s sources say that the PM has not only asked RET review head Dick Warburton to further investigate completely doing away with the renewable energy support scheme (essentially telling Mr Warburton to ‘try harder’), but also that the government’s own Environment Minister Greg Hunt–seen as a ‘moderate’ who recommends only reducing the target–has been ‘sidelined from the process and understood to be unhappy’.

The RET review panel was due to publish its final recommendations on the future of the scheme last month, but asked for an extension instead, leaving the renewable energy industry hanging in a limbo of uncertainty for a few weeks more than anticipated. The comments revealed by the Financial Review now reveal that the Abbott government, not happy with the panel’s recommendations, had sent the panel back to work to ensure that its outcome was more in line with the government’s thinking–i.e. a recommendation to scrap the scheme altogether.

The Australian Solar Council wrote today in an email to the solar industry about the Financial Review article:

The truth has finally come out on the Renewable Energy Target (RET) Review.

We understand the Prime Minister’s office has today received the Warburton RET Review report.

What does it say?

The Australian Financial Review let the cat out of the bag with today’s story.

Initally the Warburton Review were on track to recommend a ‘real 20%’ target, which would have gutted the solar industry.

But, under instructions from the Prime Minister, the Warburton Review did a hasty back track and is now recommending the axing of the RET.

The outcome of the RET review is crucial for Australia’s renewable energy industry, with billions of dollars worth of projects hanging in the balance. The final report is now expected to come out by the end of August. The RET is the most important incentive mechanism for renewable energy projects in Australia, providing ongoing revenues in the form of Renewable Energy Certificates (RECs, or Large-scale Generation Certificates, LGCs) for project developers. Income from LGCs is above beyond revenues from any electricity that they generate and sell or consume.

Although the news from the Financial Review brings further evidence to the wide-held belief that the government means to do away with the scheme, it is questionable whether it will be able to carry through with its intentions, as pro- and anti-RET sentiments are split almost evenly in the federal senate. With Clive Palmer and his party coming out strongly in support of an unaltered RET just before the new senate was sworn in, it seems unlikely that the scheme will undergo any fundamental changes.

Top image via DKA Solar Centre

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