Review of Renewable Energy Target a threat to investment and jobs

Major investment and jobs are at risk if the federal government changes the 20% Renewable Energy Target, the head of one of Australia’s largest companies told the audience at Clean Energy Week on Wednesday.

AGL Energy CEO and Clean Energy Council Chairman Michael Fraser said the current review of the Renewable Energy Target was “like asking a footballer to kick a goal and then moving the goalposts on them”.

In an address to the renewable energy industry, Fraser emphasised the need for policy certainty and called on all sides of politics to support the target, which aims to deliver 20% of Australia’s electricity by 2020.

“The last count I did showed 96% of countries with some sort of policy support for renewables. No one can argue that we’re out of step,” he said, adding that the scheme “should be left exactly where it is for now”.

In the same session, one of the world’s leading clean energy analysis firms said recent calls to soften the Renewable Energy Target would lead to a 50% drop in investment. Seb Henbest, the Australian manager of Bloomberg New Energy Finance, warned that any such change to the Renewable Energy Target or the price on carbon would run the risk of seeing no investment in large-scale renewable energy “this side of 2020”.

The savings from a softer target of $3 billion for the scheme would be “disproportionate”, with a drop in investment from $19.5 billion to $9.8 billion, Bloomberg forecasting found.

Anthea Harris, the CEO of the newly formed Climate Change Authority which will conduct the review this year, told the conference that her board was “very conscious” of the need for investment security.

“Even if we found something not designed as well as it could be, there is the hurdle of whether it is worth changing because of the disruption and the flow-on consequences. Authority members are conscious of this, and will take that into our review,” she said.

The authority is releasing an issues paper next month, calling for submissions by 14 September.

Matt Zema, the Managing Director and CEO of the Australian Energy Market Operator, said the importance of having a national renewable energy target “cannot be overemphasised”. Zema said for the first time since he had worked in the industry, Australia had seen a downturn in energy demand in the last three years, but maximum demand was still potentially growing.

He said the challenge was to deliver “a reliable and secure source of energy that does not damage our environment, at a price consumers can afford”.

Delegates at the session were told by Bloomberg that the solar photovoltaic and large-scale wind energy markets are maturing, and that $18 billion had been invested since 2001.