E&OE….
Topics: Renewable Energy Target
DAVID MARK:
Greg Hunt, the issue of the Renewable Energy Target, where it should be set, has been running for some time. You’ve been holding talks with the various industry representatives as well as the Labor Party. What is the progress of those talks?
GREG HUNT:
Good. We are making real and significant and important progress. My view is that we are within reach of an agreement which will effectively double the renewable energy that has been installed over the last fifteen years within the next five years. Real progress on a constructive basis, but in a way which will manage people’s power prices and take any risk of additional pressure off them.
DAVID MARK:
You talk about doubling the amount of renewable energy; the sticking point has been over this target. Should it be 41,000 gigawatt hours, which was the target set back when the RET first was set up, or the 26,000 that you were originally proposing. What’s the number?
GREG HUNT:
Sure, you can understand that I won’t put any particular figure on the table but I think what matters to the Australian public is that we are making real progress, we are within sight of an agreement, we’re working constructively with the sector and I really appreciate their work.
We are also working constructively with the ALP and the manufacturing sector and so the critical part here is the potential for doubling what’s been installed over the last 15 years within half a decade and that’s a very good outcome for the environment, it’s a good outcome for the sector, but it means it will be done in a way that it can actually build rather than the risk of not achieving and then falling into a de-facto, massive penalty carbon tax of $93per tonne which nobody wants to see.
DAVID MARK:
Will the doubling of that renewable power, that renewable electricity be as a result of the RET? Or are you talking about other programmes?
GREG HUNT:
No this is exclusively through the Renewable Energy Target. So the way the Renewable Energy Target works – for the listeners – is a benchmark is set. It has to be achieved by law and therefore the renewable energy has to be built and supplied to that level. If we reach an agreement which is an effective doubling then that is very, very significant.
It means that the renewable energy will have to be constructed, but it will be done in a way which ensures that it’s real renewable energy that is actually generated rather than a figure created but which is never actually built, which is then paid for by a penalty in the form of a $93 per tonne carbon tax and that’s been our concern.
I think we are very close, very close to a constructive outcome both for emissions, for solar, for renewable energy and for putting a cap in terms of removing any risk of a jump in power prices which was the legacy of the flaw in the pre-existing system.
DAVID MARK:
As you know there are a large number of projects – wind projects and other projects – that are on the shelf now because of the uncertainty over the RET. If you get the deal that you’re talking about now, that you say you’re close to negotiating, are those projects going to be taken off the shelf? Will they be built?
GREG HUNT:
Well I think this will allow additional renewable energy. Whether it’s solar or geothermal, whether it is small hydro or other forms of renewable energy, to proceed. We are of course…
DAVID MARK:
But what about those projects that have been shelved will they come into play again?
GREG HUNT:
Well of course, by definition, the projects that are most ready to go are those that are most likely to advance immediately. We are still increasing our renewable energy. I saw a list of many, many projects that have been commenced over the course of the last year.
I think that that’s been a tremendous step forward, but the risk that we all faced was failing to achieve the target because realistically the build just wasn’t possible and as a consequence, facing a massive $93 a tonne carbon tax penalty equivalent, whereas we can avoid that dead-weight cost, we can protect people’s power prices, but we can get the prospect of solar and wind and hydro and geothermal – these are real and significant steps forward.
DAVID MARK:
You’re not talking about numbers but can you give us an indication? Obviously that number is going to somewhere between 26,000 gigawatt hours and 41. Is that correct?
GREG HUNT:
That’s correct. And I’m not being…
DAVID MARK:
In the upper 30s, in the lower 40s?
GREG HUNT:
No, look, I have always said that we need to achieve a modest, sensible, balanced outcome. We’re being very reasonable. To be frank, I’ve found a very different position from the ALP in the last week and I respect and appreciate that, it’s been encouraging and constructive. And similarly we’ve found an extremely constructive approach from the Clean Energy Council and many members.
People have decided they want a deal and so I understandably won’t speculate on a number, but the order of magnitude for the Australian public is an approximate or near doubling of renewable energy in the ground and being generated.
DAVID MARK:
Greg Hunt, how much has this period of uncertainty cost the renewables industry?
GREG HUNT:
Well, I think that if we head towards a realistic target, that is the best long term sustainable outcome and it actually will advantage the sector in the medium term.
DAVID MARK:
When do you expect to sign off on a deal?
GREG HUNT:
I won’t put a timeframe on it but I would like to do it early and soon. We, of course, inherited the statutory review. It was a review enshrined in law by the ALP when they set up the Renewable Energy Target.
People can agree or disagree – it was inherited, we’ve done it, but I think we can get an outcome here which good for clean energy production, good for consumers – that has been an extremely important issue to make sure that the risk of a massive spike and penalty and burden for consumers is avoided.
DAVID MARK:
You say want to do a deal soon – what are the sticking points?
GREG HUNT:
Look I think that obviously the number and the means of calculation, but we’re close on that. Then something that’s been very important to the renewable sector has been soaking up some of the 24 million surplus credits which were created largely as a result of the phantom credit scheme where people were paid for renewable energy which was never actually produced.
Extraordinary, amazing, incredible. A bizarre Labor initiative, but we’ve had to deal with the consequences of that and there is a way through that I think we have largely agreed upon with the Clean Energy Council and those are the two most important things.
DAVID MARK:
Greg Hunt, thanks very much for your time.
GREG HUNT:
It’s a pleasure.
(ENDS)