White Paper recognises clean energy potential, misses opportunity to line up objectives with policy

8 November 2012

Pacific Hydro has welcomed the Federal Government’s energy white paper noting that it has recognised the abundant renewable energy resources which could generate most of Australia’s energy by 2050. But the missing piece of the puzzle remains the objectives governing the energy market which has still not been lined up with clean energy policy.

General manager for Australia, Mr Lane Crockett said that the white paper was critical in shaping our energy future and provided an important vision for the nation. “Renewable energy provides a significant opportunity for Australia and it’s great to see this visioning document outline the opportunity for 85% clean energy by 2050,” he said.

The white paper also reaffirms the importance of the Renewable Energy Target (RET) remaining fixed at a minimum of 45,000 GWh by 2020.

Certainty for investors was also acknowledged by government as crucial in attracting investment.  “Energy projects have a long gestation period and they are long lived assets,” said Mr Crockett.

“Ensuring certainty is central to attracting investment and in transforming our energy market to one that is much cleaner.”

The paper also recognises that the move to an energy market that prices carbon and supports renewable energy investment imposes marginal cost increases, but these are outweighed by the benefits.

“The benefits to health, regional jobs and for local business from increasing renewable energy and reducing carbon emissions are important to recognise and must be factored in when considering this change to our energy system,” added Mr Crockett.

But Pacific Hydro remains critical of what it considers the missing link between objectives of the energy market with energy policy.

“Without updating the objectives in the energy law, the energy market institutions (AER and AEMC) can effectively ignore government climate related policies. This has the potential to delay or stop new renewable energy projects coming online which will only increase costs in the longer term,” said Mr Crockett.

“The National Electricity Law (NEL) already has a number of worthy objectives, including health and safety which has been added in recent years. Given the direction of clean energy policy, it seems logical to include an emissions reduction objective in the NEL.

“Over the last ten years we have seen enormous changes in our energy market with significant volumes of renewable energy coming online and beginning to decarbonise our system. It’s been easier than we thought and we must ensure this transition can continue.”