Eclipse for solar industry under Warburton RET report

Eclipsed? Not totally.

A much anticipated Abbott Government review of the Renewable Energy Target has recommended sweeping changes to check the rapid growth of uptake of subsidised alternative energy sources, triggering a fierce backlash from the blossoming sector and calls for bipartisan cohesion from key industry groups.

After more than a week of sustained and selective leaks, the Warburton panel has set out a series of measures that the renewables industry estimates could increase the cost of solar panels for households by as much as 50 per cent, as warnings sounded that Canberra is likely to move quickly to severely prune back existing offsets.

For the Large-scale Renewable Energy Target (LRET), which primarily applies to big alternative energy power stations like wind and solar farms, the Warburton review has recommended that the scheme be should be either shut off to new entrants or caps introduced to peg renewables to growth in electricity demand.

For smaller producers like households and commercial buildings, the Waburton review has, recommended the Small-scale Renewable Energy Scheme (SRES) scheme be either immediately junked or its phase-out brought forward by a decade from 2030 to 2020.

At the same time, the review has supported the use of native timber — or “native forest wood waste” — be reinstated for eligibility as waste as “a renewable energy source”.

“Reinstatement should be based upon the regulations previously in place, which allowed eligibility on the condition that native forest wood waste was being harvested under a Regional Forestry Agreement, complied with relevant government planning and approvals processes, and was demonstrated to be genuine waste. The Panel has not been presented with any evidence that these regulations resulted in unsustainable logging activities,” the review said.

The fire-breathing recommendations come as the Abbott government tries to calculate what electoral fallout it might suffer in key marginal seats across Queensland, Western Australia and South Australia where households and businesses have flocked photovoltaic systems as a way to offset soaring power bills.

A big problem for traditional electricity retailers is that the  combination of subsidies, falling prices for solar cells and technologies like LED lights that cut consumption have combined to create heavy downward pressure on prices.

Much less clear is what effect emerging energy storage systems, like self-recharging battery banks, will have on prices if there is serious uptake.

Irrespective of emerging technological innovations, the sustainable energy industry is ropeable at the Warburton report and is urging buyers to get in quick before the solar rollerdoor slams shut.

“The Warburton report is the most dangerous and extreme attack on solar and renewable energy in Australia’s history,” John Grimes the chief executive of the Australian Solar Council said.

“If the Government accepts the recommendations. . . .some 8,000 jobs will go and thousands of small businesses will shut down across the country. Millions of Australians will find it harder to reduce their power bills.”

The jobs impact could well present a problem for the Abbott government, especially in manufacturing and metal industries sectors where suppliers have been trying to retool and redeploy factory workers as multinationals withdraw their manufacturing plants from Australia.

The ASC is also directly targeting seats that are marginal – in both the political and economic sense,

Within the week the ASC will take its fight to the bellwether NSW seat of Eden-Monaro, now held for the Coalition by former Australian Chamber of Commerce and Industry head Peter Hendy.

“The Government does not have the numbers in the Senate to implement its extreme agenda to axe the Renewable Energy Target,” Mr Grimes said.

“Peter Hendy has refused to face his voters and tell them his plans to destroy the solar industry.”

Business representatives have called for a considered response to the Warburton review and are carefully watching meter charges.

Australian Industry Group chief executive Innes Willox said a bipartisan deal “that can safeguard the interests of energy users” should be sought.

“In response to the Report, the Government should take a pragmatic approach to the RET, and pursue a bipartisan agreement on the basis of a variation of the 20 per cent target.That would benefit energy users, respect existing investments and provide a workable foundation for future investment,” Mr Willox said.

“There are many interests to be balanced in the Government response. Price relief is a high priority. Energy users have endured substantial price increases in recent years, and worse is to come in much higher gas prices. As well, the energy sector needs a reliable policy framework and the renewables industry has made substantial investments.”

The AIG head said all examinations of the RET “have concluded that extra renewables generation puts downward pressure on wholesale electricity prices”

“Nearly all such studies have found that this effect is large enough that large reductions in the RET would leave energy users worse off.”

Mr Willox said it was increasingly apparent “that the full RET target of 41,000 gigawatt hours cannot be met by 2020. This would be all the more so if the government opted to pursue a deep reduction that was frustrated in the Senate. Policy limbo and missed targets would impose costs on energy users without offsetting benefits and leave investment under a cloud.”

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