Published by Green Left Weekly. View the original article.
The Abbott government has established its own panel to review the popular Renewable Energy Target mechanism. Appointing known climate change denier and fossil fuel interests, the Abbott government looks like it has made up its mind–putting ideology ahead of good policy. But why is the RET on the chopping block? According to Ben Courtice, it’s because Australia’s big, fossil-fuel-based energy generators are having their profits squeezed by renewable energy.
The federal Coalition government is conducting a review of Australia’s Renewable Energy Target (RET), which aims to have 20% of Australia’s energy produced from renewables by 2020.
The recent appointments of prominent climate change deniers and fossil fuel industry heavies make the review panel look more like a lynch mob for renewable energy. Dick Warburton, who will head the review, is on the public record denying climate science.
However, underlying such scandalous appointments is something simpler and less absurd than flat-earth climate change denial. The big energy generators — private and state entities, who run the big power stations — are finding their profits squeezed by the growth in renewable energy.
Last August, the head of giant generator and retailer AGL, Michael Fraser, said there was about 9000 megawatts of oversupply in the national electricity generation sector. That is more than the entire generation capacity of Victoria, almost a third of the national baseload generation capacity.
Fraser made the comments in relation to building a solar power station in western NSW. RenewEconomy reportedthat to agree to proceed, “AGL Energy sought extra funding from the Australian Renewable Energy Agency to make up for equivalent estimated falls in wholesale electricity prices.”
Adding extra capacity when there is already overcapacity drags down the wholesale price. The RET mandates that by 2020, 41,000 gigawatt-hours of electricity must be generated by renewable energy. To meet this target, extra renewable energy generators have to be built.
That’s why big generators and business associations have been calling for the RET to be lowered, delayed, or both. It’s making their existing investments less profitable. Continue reading “RET Watch: Why Abbott wants to scrap the RET”