Bipartisan support for the national renewable energy target provides a strong incentive until 2020, writes Clean Energy Council policy manager Alicia Webb, but some of Australia’s states and territories have higher levels of ambition.
The 2020 national renewable energy target means a lot of work for Australia’s clean energy industry over the next four years — but then what happens? Beyond the end of the decade, we have nothing to encourage new renewable energy or a phase-out of old coal-fired power stations that are long past their expected operating lives.
It’s not surprising that some states and territories have introduced more ambitious and longer-term targets to attract jobs and investment from clean energy projects, such as solar and wind farms.
Several critics have claimed these separate schemes will distort the national electricity market. The implication here is that the NEM is some kind of unfettered free market, when it is really a hugely regulated and distorted quasi-market.
For the record, the renewable energy industry supports a strong bipartisan long-term carbon reduction policy for the national energy sector – one that will allow Australia to most efficiently meet its obligations under the Paris climate agreement.
We definitely don’t have that right now. However, earnest discussions about the electricity sector’s transition to cleaner technologies started at the last meeting of the COAG Energy Council in August, which brought together state and federal energy ministers. All those attending recognised the need for change and strategic thinking to plan for the future.
The individual state targets that have been set are:
- ACT 100% renewable energy by 2020
- South Australia 50% renewable energy by 2025
- Victoria 25% renewable energy by 2020 and 40% by 2025
- Queensland 50% renewable energy by 2030
The ACT is the only region that has set a binding target to date, with Victoria looking to legislate its renewable goals in early 2017. The other states have set aspirational targets with supporting policies to attract more renewable energy projects.
In August the ACT announced the final successful projects in its reverse auction process: the third stage of Neoen’s Hornsdale wind farm in South Australia and Union Fenosa’s $200 million Crookwell wind farm in NSW. They are the final links in a construction program that will generate enough renewable energy to power 100% of the territory’s needs by the end of the decade.
ACT Deputy Chief Minister Simon Corbell said that in the atmosphere of uncertainty that has prevailed at a federal level – and until there is a compelling national consensus for stable and supportive renewable energy policy – states and territories must play a larger role.
“There are jobs and investment in renewable energy, and state, regional and city economies can be positioned to win their share of the enormous growth in investment globally and locally,” Corbell says. “The ACT experience demonstrates the significant legislative and policy capacity available to state government, showing what can be achieved quickly and at a small cost to consumers.”
Victorian Minister for Energy, Environment and Climate Change Lily D’Ambrosio says the state’s renewable energy targets will generate thousands of new jobs, particularly in regional Victoria.
“Investors have lost faith in the national target, but we are restoring the confidence needed to invest,” D’Ambrosio says.
Investors were spooked following the two-year review of the RET under the Abbott Government, although confidence is beginning to return on the back of investments by the ACT and others.
Progress towards the various targets remains mixed. Of the states with aspirational targets, South Australia is progressing very well and its target of 50% renewables by 2025 looks achievable. The state already gets more than 40% of its power from the wind and sun.
Victoria and Queensland have more work to do – particularly Queensland, where only 4.4% of electricity is generated by renewable energy. The state government is still working on a plan to meet its 50% target, which lines up with the policy federal Labor took to the last election.
Victoria is between the two extremes, and its transition from 12% renewable energy at the end of 2015 to 25% by 2020 looks possible but challenging. Its share of renewables will need to about double in five years. For one of Australia’s most coal-dependent states, much will need to change.
And while a strong national policy remains an elusive dream, the action by the states and territories is helping the return of much-needed investment confidence to the renewable energy industry.
Interested to know more? The All-Energy Exhibition and Conference in partnership with the Clean Energy Council has a session on state government initiatives in Melbourne on Tuesday October 4 at 11 am. Registration is free.