Garnaut fails to deliver certainty to the renewable energy industry

The final Garnaut Review handed down today identifies Australia's opportunity to take advantage of its significant energy resources to reduce carbon emissions by 2050, yet its approach to the expanded National Renewable Energy Target (NRET) fails to deliver investor certainty to the renewable energy industry.

"We agree with the Garnaut Review in many aspects" said Pacific Hydro CEO Rob Grant.

"We agree that deep cuts in emissions are required to mitigate climate change and that the renewable energy sector can play a significant role in reducing emissions. Where we disagree with the Garnaut Review is in the role of NRET in developing the renewable energy industry over the next 10 years so it is at a point where it can compete effectively with existing fossil fuel power generators."

While the final Garnaut Review recommends stronger action under the Emissions Trading Scheme it also recognises this is going to be a difficult adjustment for the Australian economy. Despite this recognition, the Review fails to value the NRET as an industry development mechanism and as a vehicle to ensure we have a good chance of meeting our global obligations under Kyoto and any future international agreements.

"The reality is that if we want to see new renewable energy projects built in Australia over the next 10 years we either need an investment-grade carbon price from day one or NRET", said Mr Grant.

The Review reports that emissions from the energy sector remain the main component of an expected quadrupling of emissions by 2100 without mitigation. It also recognises that decarbonisation in Australia is essential and can be made quickly in the energy generation sector.

"Until we provide investor certainty in the development and delivery of our clean energy assets in Australia, the energy industry will not be able to achieve the type of transformation being recommended by Garnaut."

"While the Review fails to recognise the drivers that are required to deploy new low and zero emission projects and the incentives required to develop new industries, the Federal Government's commitment to implement a 20 per cent NRET by 2020 is welcomed as an essential piece of Australia's climate change puzzle", added Mr Grant.