One of the key national policies for householders, individuals, communities and businesses who want to invest in renewable energy technologies is Australia’s Renewable Energy Target (RET). Originally commencing in 1997, the RET (formerly named as MRET) has been a key policy and advocacy focus for ATA members for many years.

Never has the RET been more of a focal point however than over the past 18 months, with its impact on consumers of renewable energy technologies at all scales becoming increasingly complex and providing significant barriers to those trying to make an environmental difference through renewable energy.

With the closure of the former Solar Homes and Communities Plan (the $8,000 rebate for solar photovoltaic) in May last year, the Federal Government looked to the RET to be the main policy to drive the uptake of both large scale (e.g. wind farms and bio-energy plants) and small scale (e.g. solar PV and solar hot water) renewable energy technologies.

However, being a market mechanism that can really only drive the uptake of the cheapest form of renewable technology, the government also provided additional stimulus incentives for solar hot water, heat pump and solar PV technologies. As predicted by ATA and many other advocates in the renewables industry, it wasn’t long before the renewable energy market was oversupplied and the value of the trading certificates (RECs) was depressed to the extent that large scale projects were shelved.

For ATA members who are also seeking to increase the share of renewables in the energy mix, the impact of the Solar Credits multiplier in the RET was also a deterrent – as it actually reduced the amount of electricity generation to come from renewables under the policy!

After a host of policy inquiries, submissions, meetings and political and media campaigns throughout late 2008 and 2009, the Federal Government appears to have finally started listening to the voices of both consumers in the renewable energy marketplace and the renewable energy industry itself. ATA has been at the forefront of this advocacy work on behalf of our members and consumers more generally looking to make a difference through their renewable energy investments.

On 26th February, after significant pressure from consumer representatives such as ATA and the renewables industry more broadly, the Federal Government announced a back-flip on the RET. After almost 12 months of denying the existence of any specific problems, the government announced that it will look to split the RET in two. Effectively creating two separate markets; one for large scale renewable energy projects and one for small scale technologies.

The large scale market (to be called LRET) will see a fixed market retained for approximately 80 – 90% of the annual RET targets from 2011 until 2020. This should help with getting the REC price back up to above $50 (as it was in March 2009) and allow large wind and bio-energy projects to be financed and built.

The small scale market (to be called the Small Renewable Energy Scheme – SRES) will see a fixed price ($40) for RECs guaranteed for small scale technologies such as solar hot water, heat pumps, solar PV and micro-wind turbines. The key thing with the SRES is that the market is proposed to be uncapped, meaning that all RECs created from small scale technologies will be purchased, ensuring that these are additional to the mandatory LRET targets and likely increasing the overall annual targets (and therefore the 20% by 2020 goal). This should be music to the ears of ATA members!

Ultimately though, the announcements will be subject to a further consultation process and must be passed in both Houses of Federal Parliament to become legislated. Provided this occurs, the government proposes that these two new markets commence on 1 January 2011. We are given some hope though by recent comments from a number of Coalition MPs stating that this timeframe is too long and that the amendments should be sped up.

ATA will obviously continue to be a strong voice for its members and consumers more broadly in relation to the RET policy as it moves forward. And as we stated in our media release, whilst the amendments are a step in the right direction, the RET itself is only one of the policies required to drive Australia’s low carbon economy to a level that it can meet the urgency of the climate change challenge.

In addition to the RET, we need:;

• A price on carbon through an economy wide mechanism such as a carbon tax or emissions trading scheme;
• Exponential investment in energy efficiency right across the energy market, building codes and appliance standards;
• Strong support for emerging large and small scale sustainable technologies; and
• Strong skills and training programs to deliver the level of transition we need.

For more information, please contact Damien Moyse, Energy Policy Manager, email Damien@ata.org.au