On Friday 8 May 2015 the Industry Minister, Ian MacFarlane,
announced that the Abbott Government had agreed with the Federal
Opposition to set the Large Scale Renewable Energy Target (LRET) at
33,000 GWh by the year 2020.
The announcement was confirmed this week and follows almost nine
months of political and industry negotiation since the
Renewable Energy Target Scheme – Report of the Expert
Panel (Non-Statutory Review) was released in August 2014. We
have previously provided legal updates on the
terms of reference and the
findings of the Non-Statutory Review.
While this compromise still needs to pass through the Senate, it
offers hope that the uncertainty that has plagued Australia's
renewable energy industry in recent years will finally be over.
Compromise on the LRET
The Renewable Energy (Electricity) Act 2000 (Cth) (REE
Act) currently includes a legislated target of 41,000 GWh of large
scale generation by 2020 – supported by incrementally
increasing annual targets to this date. The REE Act also currently
provides for biennial statutory reviews of the targets by the
Climate Change Authority (CCA).
Since December 2012, the CCA has conducted two statutory reviews
of the RET in December 2012 and December 2014 and recommended on
both occasions that the LRET be maintained at 41,000 GWh. However
in August 2014 the Non-Statutory Review recommended a significant
decrease to the LRET, to 26,000 GWh and the negotiations that have
followed have resulted in a reduction in 8,000 GWh from the current
The return of some certainty
The announcement of the compromise has been met with qualified
support from the renewables industry, which has suffered from the
policy uncertainty in recent years. If the reduction in the LRET is
legislated, it is likely to result in the immediate
re-establishment of a number of current large scale wind projects
– many of which have planning approval but were awaiting
confirmation of the LRET figure.
Conversely however, proponents of large scale solar and new wind
projects have expressed disappointment in the 8,000 GWh reduction,
as it is expected that there may not be room within the 33,000 GWh
target for these (currently more costly) projects.
A stumbling block in the past few weeks has been the Abbott
Government's position of preserving the biennial reviews, with
the next review due to be undertaken by the CCA in 2016. The
CCA's 2012 RET Review recommended that the reviews be
undertaken every four years to increase investor confidence,
however this change has not previously been implemented by
respective governments. The prospect of another review in 2016
– which would be the fourth in four years – has been
strongly opposed by the Opposition and clean energy industry, on
the basis that the recent compromise will only continue the
uncertainty at a lower target. However, yesterday's
announcement has seen the Government back down from this
An additional further issue of disagreement is the Abbott
Government's proposal that wood waste be included in the
targets. The inclusion of the burning of wood waste as renewable
energy was an Abbott Government election commitment in 2013 and was
supported by the Non-Statutory Review, however it has not been
within the CCA's terms of reference for review and has limited
political and industry support.
The legislation that implements the compromised position will
still need to be passed by the Senate, which is likely to consider
the amendments before the winter recess.
Recent State government announcements
In the past fortnight, since negotiations again stalled on the
issue of the biennial review:
The Queensland Government announced its commitment to a
renewable energy target of 50% by 2030; and
A Victorian Government spokeswoman has said that the state
target would seek to lift renewable energy from about 13% to about
20% in 2020. However, a definitive goal would be set in
consultation with industry.
Despite the RET being a Commonwealth Government scheme, these
announcements may see Queensland and Victoria joining the ACT (90%
renewable energy target by 2020) and South Australia (50% renewable
energy target by 2025) in having their own targets.
In 2013 the NSW Government released the NSW Renewable Energy
Action Plan to guide NSW's renewable energy development
and to support the national target of 20% renewable energy by 2020,
while in 2013, renewables made up 93% of electricity generated in
Western Australia and Northern Territory do not currently have
renewable energy targets.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
The article examines the regulation of the oil and gas industry and breaks down the regulatory process state by state.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).