Coalition Proposal will not fix Renewable Energy Issues

Pacific Hydro welcomes the Federal Coalition's recognition of the important role that renewable energy will play in a response to climate change but remains concerned that the mix of policies put forward yesterday does not address the serious issues currently facing investors in low cost, utility scale renewable energy.

Despite passage of the Renewable Energy Target (RET) legislation last year that calls for 20% renewable energy by 2020 the industry has been becalmed due to sub investment grade prices for Renewable Energy Certificates (RECs). The problem comes about due to multiple layers of State and Federal assistance for domestic solar technologies which has in turn created a significant oversupply of RECs from these technologies.

"The Coalition has been ill advised on the best way to fix the current problem. It is the multiple layers of assistance to these technologies that has caused the dramatic and lingering crash in certificate prices," said Pacific Hydro General Manager Australia Pacific Mr Lane Crockett.

"What the Coalition is proposing is likely to make the situation worse both now and into the future."

The Coalition has proposed funding for domestic solar technologies of $1,000 per unit, which will be in addition to that which is already in place, plus the inclusion of technology bands within the scheme.

"Technology banding has not worked elsewhere as it assumes you know what technologies will be commercially viable and when they will be deployed. The multiple technology sub-segments that are created by banding will reduce transparency and create unnecessary complexity while doing nothing to help REC prices recover over the next couple of years."

With the Government's CPRS likely to be rejected again and the Coalition's refusal to pursue market based measures that put a price on carbon, it will fall to the RET to do the heavy lifting in the transformation of the stationary energy sector over the coming decade.

The Coalition is proposing to spend $10 billion, or approximately 0.1% of GDP, on addressing climate change over the next 10 years which is wholly inadequate when you consider the magnitude of the problem we face. By comparison, a properly structured RET will drive over $20 billion in new energy sector investment alone over the coming decade.

"We call on both the Government and Coalition to work on a solution to fixing the RET and quickly agree a way forward for both domestic solar technologies and utility scale renewable energy projects"

Media contacts: Andrew Richards 0409 364 484 / Emily Wood 0421 042 121