The panel conducting the review of the Renewable Energy Target (RET) for the Federal Government has released its final report.
The report assesses the operation of the RET and its impact on electricity prices and energy markets, as well as its costs and benefits for the renewable energy sector, the manufacturing sector and Australian households and makes a number of recommendations about the sector’s future.
The report includes recommendations either to abolish the Small-scale Renewable Energy Scheme (SRES) or bring forward its phase-out.
The phase-out option would mean that the last year the SRES would operate would be 2020 instead of 2030.
Should the phase-out be brought forward, it was recommended that the period for which certificates may be created for solar and heat pump water heaters be reduced by one year each year, commencing in 2016.
Year installed – Period
Prior to 2016 – 10 years
2016 – 9 years
2017 – 8 years
2018 – 7 years
2019 – 6 years
2020 – 5 years
2021 onwards – scheme closed
The report states that the RET has encouraged significant new renewable electricity generation, which has almost doubled as a result of the scheme. Installations of small-scale systems have exceeded expectations, with output from these systems already exceeding levels anticipated for 2020. To date, the RET has delivered a modest level of emissions reductions.
The report suggests that the Renewable Energy Target (RET) should be amended in light of the changing circumstances of Australia’s main electricity markets and the availability of lower cost emission abatement alternatives.
Large-scale Renewable Energy Target
For the Large-scale Renewable Energy Target (LRET) two main reform options are suggested:
1. Closing the LRET to new entrants (‘grandfathering’).
2. Setting an annual target to allocate a share of growth in electricity demand to renewables.
The report also details a number of other recommendations including exemptions, solar PV system installations and funding processes.
The Government will consider the findings of the independent panel’s review in the context of the costs and benefits of the scheme, the impact on electricity prices and markets and sovereign risk issues. The Government will announce its response to the report in the coming weeks.
There are currently 416 renewable energy power stations accredited under the large-scale RET and around 2 million household renewable energy systems installed under the small-scale scheme.
The full list of findings and recommendations can be found in the full report.