For the past few weeks the Labor party has pulled out of all negotiations regarding the Australia Renewable Energy Target for 2020. However, clean energy companies are now urging the party to resume RET talks in hopes to break the current impasse that is bringing the industry down.
Just recently the Clean Energy Council published a report stating that the breakdown of the bipartisan agreement will affect hundreds of millions of dollars in investments towards clean energy every single year.
The Clean Energy Council also points out that if the RET issue is not resolved then the value of Renewable Energy Certificates will drop beyond salvation. Annual revenue losses may increase from $400 to $500 million in relation to current renewable energy projects in the country.
Clean energy companies will suffer loses if RET cuts go ahead
Clean energy companies currently employs over 21,000 people but many of these job opportunities may be lost, along with the closure of several businesses, if the RET review is not resolved. A total loss of future investments (by 2020) is estimated to be around $14.5 billion.
Ever since Labor walked out of the negotiations about one month ago, the Government and the Opposition have been the only ones on the table debating over the future of the RET policy and what its future may be.
Greg Hunt, the Environment Minister, along with Industry Minister Ian MacFarlane have been urging the Labor party to return to the debate but Labor shows no indications of renewing talks until the Government offers better terms than before.
Coalition sticks by modified Direct Action Plan goals
Unfortunately, up to this point the Government has not changed its course – the Government has proposed of dropping the 41,000 GWh RET to a mere 27,000 GWh RET by 2020. This is a total drop of 40% but the government is stating this is actually the “true 20%”.
The Clean Energy Council noted that this proposal for a sudden change in the RET was completely unacceptable and would spell an economic disaster for the clean energy industry.
However, if there is any hope for the RET to see the light of day then Labor and the Government have to come to some sort of compromise and agreement.
Clean energy companies already seeing a loss from RET alterations
Ever since the Government submitted its review and proposed to scale back the 2020 RET, investments in the industry and clean energy companies have seen a significant drop. In the first 3 quarters of 2014, investments have totaled up to only $238 million, a big drop compared to 2013’s $2 Billion.
This would mean jobs are being lost and clean energy companies invested in renewable energy are bound to shut their doors before 2020 rolls in. The Clean Energy Council had stated that while the rest of the world was moving forward, the Australian Government was running in the exact opposite direction.
Unfortunately, that direction would lead to an inevitable “carbon bubble” where investments in fossil fuel would be rendered moot in the near future when coal and oil lose their global market value.
The only chance for the RET is to see a compromise between the two parties. The Government’s proposal of slashing the RET by 40% would nearly terminate the country’s renewable energy industry and Labor party is only willing to budge and return to the table if this number drops.