The Labor Party and the Clean Energy Council, the primary organizations that represent the renewable industry sector, have made a last ditch effort to get an agreement regarding the Renewable Energy Target before Christmas last year.
In a bit of a risky move, the CEC has softened its hard stance of that they will not accept any changes to be made on the RET. The organization and the renewable industry is now ready to reveal its cards on the table.
Renewable industry political agreement to compromise on RET
In a letter to Tony Abbott, Australian Prime Minister, and Bill Shorten, the leader of the opposition, the CEC states: “While we do not accept there is any cogent public policy case for reducing the RET, in order to restore bipartisanship on the policy we would consider proposals with a target for RET in the mid-to-high thirty thousand in 2020.’’
Whatever the CEC’s and the renewable industry original intent is in writing these statements, it will eventually send the signal to the government that the renewable industry is conceding to the government’s move of cutting the large-scale component of the RET from 41,000 Wh in 2020 to only35,000 Wh.
Additionally, the CEC letter states that there’s a need to increase the targets for LRET’s interim years from 2016 to 2017. Utility-scale developers believe that this is important for it will be the way to remove a great oversupply of renewable energy certificates in the energy market and increase their price.
If this happens, it will induce power retailers to quickly initiate making contracts to buy power from new projects to satisfy the needs of the energy market.
Government still planning on reducing RET commitments
But the government’s response given to Climate Spectator regarding Labour’s acceptance of the CEC proposal is to continue its plan to reduce the RET together with putting a cap on the renewables’ market share by 20%.
“The Government is ready to resume negotiations bearing in mind the clear stated position that the energy market has changed and that the 20 per cent target based on 2009 forecasts no longer reflects market reality,” a spokesperson for Minister Hunt said.
“Recalibration of the RET must take this into account and better align the target with changing consumption and market forecasts,” the spokesman added.
This kind of statement reveals the intent of the government of not willing to stray off from its 27,000 GWh self-imposed target.
If the government would really be obstinate in this position, the strategy of CEC of conceding and abandoning their no-change position of the renewable industry appears to have failed.
Not all hope is lost for renewable industry
However, there might still be some hope for the CEC and the renewable industry. In its reply to Minister Hunt’s spokesperson, the Climate Spectator stated that Hunt’s response hinted that the government was not interested in agreeing to what was proposed by the CEC.
The reply from Hunt’s office seems to indicate that they are still open to negotiations. To quote: “The Government has always been prepared to negotiate with the Labour Party on the RET. The specific details of those negotiations would take place in-confidence and we would again encourage the ALP to return to the table.”