Labor and the Coalition government have now agreed to cut the federal renewable energy target (RET) from 41,000 gigawatt hours in 2020, to 33,000 GWh – a reduction of almost 20%. This agreement has been hailed as restoring stability to the industry, after a year plagued with uncertainty and featuring two reviews.
However, this is still a significant cut, particularly as the target is a significant part of Australia’s policy response to climate change.
Meanwhile, Victoria has committed to restoring its own renewable energy target, the VRET, following other states in developing renewable energy policy. However a clause the federal legislation prevents schemes similar to the federal RET.
How can the states get around this and support their industries?
Australia’s RET began in 2001 with the Mandatory RET of 9,500 GWh of renewable energy generation by 2020. In 2004 the Howard government rejected the Tambling review recommendations to increase the target.
Following this decision, with a fledgling renewable energy industry threatening to fold, Victoria, NSW and SA all announced their own renewable energy targets and support measures.
In a case of history repeating itself, several state governments have again announced their own targets. South Australia already had a target for 50% by 2025 and the ACT has a target of 90% by 2020.
More recently, Queensland committed to generating 50% of its energy from renewable sources by 2030 and Victoria committed to re-instating a Victorian RET (though no target was specified).
The renewable roadblock
Under the Renewable Energy (Electricity) Act 2000, corporations don’t have to comply with the state schemes which “substantially correspond” to the federal RET (in section 7c).
This commitment was part of an agreement between state and federal governments to pursue strong action on renewable energy through a national scheme, finally ending the inaction of the federal government under John Howard. The explanatory memorandum of the amending act expressly states that the VRET “substantially corresponds” to the federal RET scheme.
Victoria’s Energy Minister, Lily D’Ambrosio recently stated, the revival of the VRET is currently prevented by a clause in the federal RET legislation.
The Federal Government must move out of Victoria’s way and change the law. Our state needs a proper renewable energy target, to support the industry and reduce pollution.
However federal environment minister Greg Hunt replied in a letter to D’Ambrosio:
Like the Australian Capital Territory’s programme, the Victorian government could underwrite the deployment of renewable energy by spending Victorian taxpayer funds.
So what can Victoria do?