While the Renewable Energy Target is now lower, it will
still require substantial increase in renewable energy capacity
over the next five years.
Australia's Renewable Energy Target for 2020 will be 33,000
GWhpa, following the passage on Tuesday night of the Renewable
Energy (Electricity) Amendment Bill 2015.
The new target is significantly lower than the current target of
41,000GWh, but the passing of the Bill will end a period of
uncertainty for the industry and is likely to result in increased
What's the purpose of the Renewable Energy Target?
The RET was introduced as Federal legislation in 2000 in the
Renewable Energy (Electricity) Act. In line with the
Government's commitment that the equivalent of at least 20
percent of Australia's electricity would come from renewable
sources by 2020, the RET was intended to require electricity
retailers and other large electricity buyers to source an
additional 2 percent of their electricity from renewable or
specified waste-product energy sources by 2010.
The 2000 Act was revised in 2009 to be split into separate
incentives for large-scale and small-scale generation, and contain
escalating targets for the period 2010-2020.
Why is the renewable energy target being changed now?
The Government proposed changes to the RET in response to the
key conclusions of the independent expert panel review chaired by
Mr Dick Warburton into the operation, costs and benefits of the
RET, which found that:
the RET had encouraged significant new renewable electricity
generation (with an increase of almost 50%);
the RET was contributing to a large surplus of electricity
generation capacity as a result of an unexpected decline of
electricity demand which led to much lower electricity demand
forecasts for 2020; and
the RET provided relatively high-cost emissions
The Bill was prepared following lengthy negotiations among the
major parties, and submissions from industry groups, about what
changes should be made to the RET.
The stated purpose of the Bill is to better reflect electricity
market conditions, provide certainty to the renewable energy
industry and enable sustainable growth in renewable electricity
Key features of the Renewable Energy (Electricity) Amendment
The Bill makes the following changes to the Renewable Energy
reduction of the profile of annual targets under the Large
scale Renewable Energy Target (LRET) with a 2020 target of 33,000
GWh of renewable electricity instead of 41,000GWh;
introduction of a full exemption for the electricity used in
emissions-intensive trade-exposed (EITE) activities to replace the
current partial exemption; and
removal of the requirement for legislated biennial reviews of
Biomass back into the mix of renewable
The Bill also reinstated biomass from native forest wood waste
as an eligible source of renewable energy. This change was the
subject of much debate in the Senate – and subject to
attempts by both Labor and the Greens to remove it – but
ultimately it was made.
What does the changed RET mean for the renewable energy
Clayton Utz communications are intended to provide
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