Whether the Abbott government finally agrees with a scaled back target or an effective closure, any changes seem likely to be blocked in the Senate, where the Palmer United Party has promised to side with Labor and the Greens.
But it matters not. The large-scale renewable energy industry has already ground to a halt. No new projects have reached financial closure since the election of the Abbott government, and the Abbott government knows that even by doing nothing — apart from allowing continued uncertainty — no new projects will come to market.
Households will also be affected. They have so far contributed $12 billion of the $18 billion invested in renewables over recent years, initially driven by generous feed — in tariffs and then as a hedge against rising electricity prices once those tariffs were removed. The government, though, can remove some of those remaining incentives that defray the upfront cost of the system, without needing legislative changes. Industry experts say that could cause the rooftop solar market to fall by one-third or even half, with the loss of thousands of jobs.
Meanwhile, state governments — with huge vested interests in state-owned networks and generators — continue to act against renewables. The Western Australian government is even canvassing importing coal from Indonesia rather than moving to develop renewable energy projects at home, while in Queensland, businesses have been hit by a whopping $500-a-day service charge (essentially to read the meter) to dissuade them from installing solar.
The renewable energy industry — which possibly unwisely sought to negotiate a “compromise deal” with the big three utilities in 2013 — said a move to halt the target would be “devastating” to the industry.
“Such a move would be reckless, given the government’s own analysis shows slashing the RET would save no money on power bills, yet would devastate billions of dollars of investments made in good faith in renewable energy projects across the country,” Clean Energy Council acting CEO Kane Thornton said.
“Hundreds of Australian and international investors have built their businesses based on the strong bipartisanship of this policy which has existed in legislation since 2001. Tearing up this bipartisanship, and the policy itself, would show that the Australian energy sector is clearly not open for business — it would stop industry dead and smash investments that have already been made.”
Some international groups, such as US solar developer Recurrent Energy, have already packed up. Others, including Goldwind and Trina, have warned of the potential fallout, while Australian groups Pacific Hydro and Infigen Energy are directing their efforts overseas.
The Australian Solar Council echoed the CEC remarks. It is taking its “Save Solar” campaign to marginal electorates, with the first stop at the northern Brisbane seat of Petrie, held by the LNP’s Luke Howarth, this Thursday. The ability to make solar a potent political issue — many marginal electorates boast more than 20% solar penetration — appears to be their last resort.
“Solar saves money, creates jobs and shifts votes. The Abbott government is about to find out how much Australians love solar and the Renewable Energy Target,” American Solar Council CEO John Grimes said.
This article originally appeared on Crikey.
