Time running out for RET resuscitation

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As Ai Group Chief Executive Innes Willox lays out in the Australian Financial Review today, fixing the political uncertainty over the Renewable Energy Target (RET) is growing ever more urgent.

Innes’s piece points out that the once-yawning gulf between the Government and Opposition has now been narrowed to the point that neither side needs to move far to secure the much-needed bipartisan deal. The chart below sets out some additional context for this contention.

The chart shows:

  • the currently legislated Large-scale Renewable Energy Target (LRET), to which the Opposition initially wished to stick;
  • the much lower so called ‘real 20%’ target that was initially pursued by the Government; and
  • straight line trajectories to 35 and 33 terawatt hours in 2020, which have been speculated to be the outer limits of where the Opposition and the Government are willing to go in current negotiations. As can be seen, they’re just not that far apart.

Note that a real target trajectory would need to differ from these straight lines in order to deal with the current excess of Large-scale Generation Certificates in the market, or a cut would pose serious risks to existing investments.

RET_chart

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Tennant Reed
Tennant is Principal National Adviser – Public Policy at Ai Group. He has worked heavily on climate and energy issues, advising Ai Group’s Leaders’ Group on Energy and Climate Policy and developing reports on natural gas supply, energy prices and energy efficiency. He also works on a range of issues related to manufacturing and innovation. Previously he was an adviser in the Department of Prime Minister and Cabinet, working on fiscal policy, stimulus and infrastructure.

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