Jul 24 2014

Australia’s Uncertain Future

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The Renewable Energy Target (RET) scheme in Australia was designed to ensure that 20 percent of the country’s electricity come from renewable resources by 2020. Since 2011 the scheme has operated in two parts: the Small-scale Renewable Energy Scheme (SRES) and the Large-scale Renewable Energy Target (LRET) (Renewable Energy Target, Australian Government). The LRET is meant to create an incentive for energy companies via making certificates for every megawatt-hour produced by an accredited power station. These certificates can then be sold to electricity retailers who must surrender them annually in order to show their compliance with the RET’s protocol (Renewable Energy Target, Australian Government). Essentially, this makes the electricity companies in Australia fulfill the role of middle-man in order to meet the national quota for renewable energy.

 

http://www.ecocitizenaustralia.com.au/wp-content/uploads/2011/04/renewable-energy-map.jpg
The SRES creates an incentive for households and small businesses to install renewable energy systems, again, in exchange for certificates that can be sold to electricity companies. In practice, most installation companies usually offer a payment for the right to create their own certificate in order to simplify the process (Renewable Energy Target, Australian Government).
The energy developer, Pacific Hydro, has reportedly withdrawn millions of dollars worth of investment in Australia due to uncertainty over the country’s plan to have 20 percent renewable resource generation by 2020. A review by the federal government of Australia is underway, but Pacific Hydro says the review is taking too long (Gibson, 2014). Many leaders in Australia have said that this review is unnecessary and has only served to cause hesitancy in potential energy companies like Pacific Hydro. The executive manager of Pacific Hydro recently made a statement saying that no one want to invest in a climate where renewable energy targets are being debated and banks are unwilling to finance these energy projects (Gibson, 2014).

http://www.aph.gov.au/binaries/library/pubs/briefingbook43p/images/powering-australia-from-renewable-sources-pie-chart.png
During this review period there is virtually no investment in renewable energy at this time. If the Australian government decides to reduce their RET policy or scrap it completely, foreign investors will likely be out of the picture for the foreseeable future (White, 2014). Many advocates of the renewable energy sector feel that the entire purpose of the the review in order to reduce the target goal or get rid of it completely (White, 2014). Either way, Australia’s hesitancy to engage in the renewable energy market at this time will hinder them significantly into the future. These companies only want to invest in areas where renewable energy progression is a certainty and not up for debate.
Citations;
Gibson, Sallese. Industry uncertainty puts renewable energy projects at risk. July 21, 2014. <http://www.abc.net.au/worldtoday/content/2014/s4050081.htm>

White, Andrew. Green energy warns against RET flip-flop. July 9, 2014. <http://www.theaustralian.com.au/business/green-energy-warns-against-ret-flipflop/story-e6frg8zx-1226982269655?nk=4136dcad3af02df2e998c736e17681e6>

The Renewable Energy Target (RET) scheme. Australian Government, Department of the Environment. <http://www.environment.gov.au/climate-change/renewable-energy-target-scheme>

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