Senate debates

Wednesday, 3 February 2010

Renewable Energy and Target

4:05 pm

Photo of Christine MilneChristine Milne (Tasmania, Australian Greens) Share this | | Hansard source

I move:

That the Senate—
notes that:
achieving deep cuts in greenhouse gas emissions in the medium term requires the rapid expansion of renewable energy,
the price of Renewable Energy Certificates (RECs) has collapsed because the supply of RECs exceeds demand,
the price of RECs is forecast to remain too low to support large-scale renewable energy projects for some years, stalling wind industry investment and threatening the Solar Flagships program for large-scale solar,
the large number of RECs being created by a surge in solar and heat pump hot water and photovoltaic system installations is a major contributor to the problem, and
these industries have been stimulated by:
the rebate for solar hot water systems ($1 600) and heat pumps ($1 000),
the introduction of the Solar Credits Scheme multiplier which provides four ‘phantom’ deemed RECs for systems up to 1.5 kilowatt in size, and
dubious methodologies for calculating the number of deemed RECs, particularly for some heat pump systems; and
calls on the Government to immediately address the flaws in the design of its Renewable Energy Target so that a genuine 20 per cent of renewable energy by 2020 can be achieved.

Photo of Joe LudwigJoe Ludwig (Queensland, Australian Labor Party, Manager of Government Business in the Senate) Share this | | Hansard source

Rather than read out the statement, I seek leave to incorporate the statement.

Leave granted.

The statement read as follows—

  • The Government has significantly expanded support for the renewable energy industry by increasing the Renewable Energy Target to 20 % of electricity from renewables by 2020 and providing support for large scale solar power generation under the $4.5 billion Clean Energy Initiative.
  • The price of Renewable Energy Certificates (RECs) is set by the market, depending on the supply of renewable energy and demand created by the RETs legislated targets.
  • The REC prices often quoted are for the spot market. Most renewable energy projects enter into long-term contracts for the sale of RECs and are therefore less subject to short-term fluctuations on the spot market.
  • The significantly expanded targets will boost demand for RECs and growth in the renewable energy sector.
  • For example, the current target for 2010 is 12,500 gigawatt-hours, up from 8,100 gigawatt-hours, strengthening the demand for RECs. During March, the Renewable Energy Regulator will quantify the RECs obligation in 2010 for RET-liable parties.
  • The annual targets increase further in the period to 2020 and are maintained at 45,000 gigawatt-hours until 2030.
  • The Government is working with states and territories to review a number of specific RET issues, including factors impacting on the REC price.
  • The Council of Australian Governments (COAG) received a report on specific RET issues in December 2009 and will explicitly examine the current state of the RET spot market, including any implications for the deployment of large-scale projects such as wind farms.
  • COAG is expected to consider the review in early 2010
  • The Government opposes this motion

Question agreed to.

4:06 pm

Photo of Kerry O'BrienKerry O'Brien (Tasmania, Australian Labor Party) Share this | | Hansard source

by leave—The government oppose this motion. We recognise that Senator Milne, with the support of the opposition, has the numbers for it and we will not be calling for a division.