Renewable Energy Policy Development in Australia from 2001 to 2017

By David Holland

This article has been adapted from assignment work from a Master of Environmental  Management. Subject Environmental Policy.

Under the 1992 United Nations convention on climate change a global strategy was agreed to at the Kyoto meeting in 1997 on combating Climate Change. (European Commission Directorate-General for Research Information and Communication Unit 2003) As a result Australia committed to a series of targets, one of which was a target on renewable energy production. The Howard government agreed to a target of 20% renewable Energy production by 2020. In 2001 the government introduced the Mandatory Renewable Energy Target scheme (MRET). (Kent 2006)

Early on within Australia, very little concern was raised about climate change issues and as a result did not drive the policy agenda for the Australian government. Only after the introduction of the MRET and investment started to flow into this area of renewable energy did the public awareness grow. Even though environmental groups were aware of climate change, it wasn’t until after 2009 when investment became unmanaged and the Gillard government had to split the MRET into two parts, one for small-scale energy systems (Small Renewable Energy Target (SRET)) and one for large-scale projects (Large Renewable Energy Target (LRET)) that public opinions became vocal. (Holland 2010)

This complication in the RET allowed a considerable political attack to be mounted by the Liberal opposition on the mismanagement of the scheme and allowed the media and parliament to build a case for climate change not being real. This started to divert public opinion away from a concerted effort by Australia to reduce carbon omissions.

By the 2013 federal election many Australians believed that climate change was not really occurring in the face of a much quieter scientific community who had the damning data that exposed the facts of not only climate change occurring but that the climate change the world was experiencing was human induced (anthropogenic) and was poised to course damage to the earths biological system.

As indicated above, originally the Australian government was under pressure from the United Nations to participate in the Kyoto protocol, however environmental groups in Australia were agitating for inclusion and action within Australia, but the softening of policy after the 2013 election was as a result of pressure put on the government by big business through impassioned advocates for the case of climate change does not exist and latter that it is not anthropogenic climate change.

As a result, the government in 2015 took the step to reduce the LRET arguing that a reduction from 41,000GwH to 26,000 GwH was an acceptable target by 2020. Parliament finally agreed on a 33,000 GwH target adjustment for large projects.

As a result of these policy changes, renewable energy investment is at risk in 2015 within Australia, while the world trend is for more investment. (Frankfurt School-UNEP Centre/BNEF. 2015) (Uibu, Katri, 2015, ABC News).

This policy change had no direct public support, but was part of a perceived mandate by the people at the 2013 federal election when the Liberal Party gained power. This election was fort over the carbon pollution reduction scheme and putting a price on carbon (Carbon Planet). After the election the new government implemented a new scheme called the carbon emissions reduction scheme, which was regulated by the Clean Energy regulator and funded by the Emissions Reduction Fund.

The real reason the government changed the way a reduction scheme would operate from a carbon market to a emissions regulation system was because businesses were seeing the costs of producing goods rising and households were seeing power prices rising.

The government has kept a lot of the detail of the Carbon Emissions Reduction scheme out of the media and as a result people have no clue as to how much money is being spent on this scheme and even what the resultant emission reductions achieved actually are. Many would be apathetic as to the efficiency of this policy and will only be outraged when they are actually told the cost of the program. (Hannam 2015)

Still there are others that are happy that their wallets are not being hit with high power prices and have no interest in the future expenses that may occur when climate change starts to affect economic circumstances out of the control of the government. (Remeikis 2015)

So the new system has quieted the public outrage of increased power prices, but there is still concern in the environmental lobby that Australia is not doing enough and not sharing enough of the burden to reduce carbon emissions. (Sturmer, Jake 2015)

As mentioned earlier the policy of the RET was introduced by the Howard government in 2001 at 9500GWh. A review in 2003 found that by 2007 the incentive to invest in renewables would decline. As a result Victoria in 2006 started a scheme called the “Victorian Renewable Energy Target”. Due to the need to give more incentive for investment the Gillard government in 2009 increased the target to 45,000 GWh, a 20% renewable mix. Later in 2009 it was found that small renewable energy projects had devalued the price of the Renewable Energy Certificates (REC)s affecting the investment returns for large scale projects. The MRET was split in February 2010 allowing 41,000 GWh for large projects with a cap on the price of a small scale REC of $40 and an allocation of 4000GWh. (Holland 2010 pp.6) (St John 2014)

Pressure on the Liberal government in 2015 by the power companies and an argument that had arisen, and argument that the LRET is impacting the budget, a proposal was put by the Liberal government that the target should be reduced to 26,000GWh by 2020. Since the LRET costs are bourn by the consumer at about 5% of the cost of electricity, it is difficult to understand how this impacts on the budget. Due to Labor Party pressure and the cross benches, parliament only reduced the LRET to 33,000GWh. (Burge 2014)

After the Labor party agreed to the 33,000 Gwh compromise in the parliament for the LRET there was considerable negative sentiment for the decision in the Labor movement. Labor members, who are a cross-section of Australia from all areas both rural and urban, and after a survey of 365 branches across Australia voted, (in most cases unanimously), to increase the target to a massive 50% by 2030, which was well publicised as a policy change by Labor as courageous. (Wade 2015)(Kenny 2015)

As we move from 2016 into 2017, little change seems to be on the horizon to address the impending impacts of climate change into the future, even as we continue to break weather records on a monthly basis which could be the canary that indicates that we are experiencing increasing effects of climate change.

 

References:

Holland, D.(2011), Renewable energy initiatives budgeted by the Gillard government, Habitat Association, https://habitatassociation.com.au/2011/06/11/renewable-energy-initiatives-budgeted-by-the-gillard-government/

Holland, D.,(2011), Influencing the Australian Federal Government on Renewable Energy Policy, Habitat Association, https://habitatassociation.com.au/2011/12/21/influencing-the-australian-federal-government-on-renewable-energy-policy/

Habitat centre for renewable energy,(2011), The introduction to Renewable Energy production on the Central Coast and Lower Hunter in New South Wales (NSW), https://habitatcenterforrenewableenergy.wordpress.com/2011/10/15/the-introduction-to-renewable-energy-production-on-the-central-coast-and-lower-hunter-and-new-south-walessw/

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Long, Stephen, (8th July 2014), Solar experts say Australian renewable energy investment being stifled by Government policy, ABC News, http://www.abc.net.au/news/2014-07-07/renewable-energy-investment-killed-by-government-policy/5575262

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Holland, D. (2010) The Renewable Energy Report Card Don’t Sell Australia Short Discussion Paper, Habitat Web site, https://gallery2020publishing.files.wordpress.com/2011/05/the-renewable-energy-report-card-identification-of-renewable-energy-sources-revision.pdf

Wikipedia, Renewable Energy in Australia, Government policy, The Mandatory Renewable Energy Target, https://en.wikipedia.org/wiki/Renewable_energy_in_Australia

European Commission Directorate-General for Research Information and Communication Unit, (2003), Renewable energy technologies and Kyoto Protocol mechanisms, United Nations, Luxembourg: Office for Official Publications of the European Communities, Printed in Belguim, http://www.eurosfaire.prd.fr/sustdev/documents/pdf/Renewable_Energy_kyoto-mechanisms_en.pdf

Kent, A., Mercer, D.(2006), Australia’s mandatory renewable energy target (MRET): an assessment , Journal Energy Policy, Vol. 34, Issue 9, Page 1046-1062, Research repository, RMIT, Publisher Elsevier Science, https://researchbank.rmit.edu.au/view/rmit:8447

Frankfurt School-UNEP Centre/BNEF.( 2015). Global Trends in Renewable Energy Investment 2015, http://www.fs-unep-centre.org (Frankfurt am Main) Copyright © Frankfurt School of Finance & Management gGmbH 2015, http://fs-unep-centre.org/sites/default/files/attachments/key_findings.pdf

Uibu, Katri, (2015), Renewable energy investment: Government ‘sabotages’ thousands of jobs as it ends wind, solar power investment, Australian Solar Council warns , ABC News, http://www.abc.net.au/news/2015-07-13/government-‘sabotages’-thousands-of-solar-energy-sector-jobs/6615778

Carbon Planet, Australia’s Carbon Pollution Reduction Scheme, http://www.carbonplanet.com/CPRS ,

Clean Energy Regulator, About the mechanism, http://www.cleanenergyregulator.gov.au/Infohub/CPM/About-the-mechanism

Sturmer, Jake, (14 Aug 2015), Government’s ‘substantially weaker’ emission reduction targets not enough, Climate Change Authority says, , Reported by, ABC News, http://www.abc.net.au/news/2015-08-14/emission-reduction-targets-not-enough-climate-change-authority/6699034

Wade, Felicity, (May 2015), LEAN response to CFMEU on renewable energy targets, Labor Environmental Activists Network, http://www.lean.net.au/lean_response_to_cfmeu

Hannam, Peter, (Nov 2015), Turnbull climate plan to deliver only one seventh carbon cuts: climate institute, Sydney Morning Herald,  http://www.smh.com.au/federal-politics/political-news/turnbull-climate-plan-to-deliver-only-oneseventh-carbon-cuts-climate-institute-20151110-gkvwx6.html#ixzz42ewVwnai

Remeikis, Amy, Electricity prices likely to drop: LNP, Labor claiming credit, 30th April 2015, Brisbane Times, http://www.brisbanetimes.com.au/queensland/electricity-prices-likely-to-drop-lnp-labor-claiming-credit-20150430-1mwtee.html

Noonan,  Andie , (2015), Paris climate talks: What have world leaders had to say on climate change?, , ABC News, http://www.abc.net.au/news/2015-11-30/world-leaders-on-climate-change-ahead-of-paris-talks/6847992

COAG paper, RENEWABLE ENERGY TARGET SCHEME DESIGN, https://www.coag.gov.au/sites/default/files/Renewable_Energy_Target_Scheme.pdf

St John, Alexander, Dr.(2014), The Renewable Energy Target: a quick guide , Science, Technology, Environment and Resources Section, Australian Parliament, http://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/rp/rp1314/QG/RenewableEnergy

Burge, Ben, (19 Sep 2014),The dirty dozen myths of the RET debate , The Australian Business review, http://www.businessspectator.com.au/article/2014/9/19/renewable-energy/dirty-dozen-myths-ret-debate

 

 

 

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