In December last year, we updated you on the Federal
Government's proposed implementation of the Renewable Energy
Target (RET), which will result in at least 20% of
Australia's electricity supply being generated from renewable
energy sources by 2020.
Since that time, some important developments have occurred that
are sure to give the green light to more clean energy
Go-Ahead From COAG
On 30 April 2009, the Council of Australian Governments
(COAG) agreed to the new expanded RET in
essentially the same terms as we reported on last year. However,
some more detail has been given about the design of the scheme.
As we foreshadowed, COAG has recognised the impact of the RET on
trade-exposed industries in the context of the Carbon Pollution
Reduction Scheme (CPRS) and the global recession.
Therefore, emissions-intensive trade exposed
(EITE) activities covered by the CPRS will enjoy
some exemptions from liability under the RET. Exemptions of 90% or
60% will apply, corresponding to the level of assistance provided
under the EITE framework (it is likely that these exemptions will
be revised to reflect the Global Recession Buffer, which increases
assistance to 95% and 70% respectively – see our
Legal Update on Changes to the CPRS). The exemptions will only
apply above the RET's existing 9,500 GWh target and will be
reviewed in 2014.
Under the current RET scheme, liable entities can elect to pay a
shortfall charge to meet their obligations. At the time of our last
update, the shortfall charge for the RET had not been set. COAG has
now indicated that the shortfall penalty will be increased to $65
per MWh. The current shortfall is $40.
COAG has also agreed to examine some of the eligibility
provisions of the RET for new small-scale technologies as well as
heat pumps and rules for off-grid resource projects to ensure that
the eligibility rules remain relevant to reflect new technologies
2009 Federal Budget To Drive Further Investment In Clean
On 12 May 2009, the Federal Government handed down its budget,
which included several important measures to drive an increase in
renewable energies. In particular, the Government announced that it
would invest $4.5 billion in a new Clean Energy Initiative, the
purpose of which is to provide the critical infrastructure that
supports low emission technologies and creates low pollution
As part of this initiative, the Federal Government intends
Establish a new body called Renewables Australia, which will
receive $100 million in new funding and administer $365 million of
the existing Renewable Energy Fund;
Establish up to four new Solar Flagship Projects to demonstrate
the viability of solar technologies, investing up to $1.5 million
over six years;
Provide an additional $271 million to continue the Solar Homes
and Communities Plan until the introduction of Solar Credits as
part of the expended RET; and
Provide $2 billion over nine years towards carbon capture and
storage (CCS) flagship projects to help accelerate
the development and deployment of low emission coal technologies by
supporting the demonstration of industrial scale CCS flagship
Even with the uncertainty surrounding the implementation of the
CPRS, it appears that Government support of and investment in clean
energy technologies will continue. We will continue to update you
on any further developments.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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