Scrapping the Australian Renewable Energy Target could have catastrophic ramifications for the renewable energy industry in the country, as well as consumers and employment, all the while delivering huge profits to power companies, according to new analysis from research firm Bloomberg New Energy Finance.
The recently elected Tony Abbott/Liberal Government is reviewing the current Renewable Energy Target — a target of producing at least 20% of all electricity from renewable energy sources by 2020 — in line with the party’s absurd take on clean energy. Earlier this year, Treasurer Joe Hockey was reported as saying that the wind turbines he drives past on his way to work are “utterly offensive” but that he is powerless to close them down. Hopefully there are few — if any — budget decisions based on whether or not Joe Hockey’s view is obstructed.
According to Bloomberg New Energy Finance (BNEF), the current Renewable Energy Target is expected to drive $35 billion (AUD) of investment in clean energy, employ 25,000 workers each year in construction and operations, reduce greenhouse gas emissions from power generation by 5%, and prevent future surgest in power prices by supplying electricity for 20-25 years without ongoing fuel costs.
The catch? It will oversupply the electricity market and could place pressure on the profitability of existing electricity generators.
Heavens no! A changing market affecting the entrenched behemoths? How on Earth could we have ever seen this coming?
Compare those benefits with the changes that would follow if the Renewable Energy Target is reduced in line with the hopes of some power company proposals: a drop of $12 billion AUD in investment; a drop of 6,600 jobs; 3% higher greenhouse gas emissions; and the kicker — power prices that increase by 1% in the year 2020 for the average household, a price that will increase a further 3% by 2030.
Needless to say, if the Target is cut altogether, the figures get even worse.
“Cutting or reducing the Renewable Energy Target is likely to result in less competition among fossil-fuel power generators and strong future increases in the price of electricity,” said Kobad Bhavnagri, Bloomberg New Energy Finance’s head of Australia. “This helps to explain why many of Australia’s largest power companies are now pushing for a reduction in the target.”
The White Paper compiled by BNEF is available here, but one thing is for sure, there will need to be a tonne of pressure placed on Tony Abbott, Joe Hockey, and the Australian Liberal Government if Australia is to prevent itself falling even further behind industrialised nations in a world of changing climates — both environmental and economic.