Oct. 26 (Bloomberg) -- Australia’s renewable energy target should be retained in its current form to avoid undermining investors’ confidence in wind, solar and geothermal power, according to the government’s adviser on climate change.
Australia should stick by its target to get 41,000 gigawatt hours of electricity from renewable sources by 2020, the Climate Change Authority said today in a preliminary review of the policy before its final report due in December.
The target should be maintained even though it would put the country on course to get about 25 percent of its power from renewable energy rather than the 20 percent originally intended, according to the authority. Some power companies including CLP Holdings Ltd.’s Australian unit, TRUenergy Holdings Pty Ltd., have said that the target should be lowered to account for falling electricity demand and to cut costs.
“The challenge is to strike a reasonable balance between encouraging further investment in renewable energy, leading to ongoing reductions in greenhouse gas emissions, and the costs of the scheme to household and business consumers of electricity,” according to the climate authority’s statement.
Significant investment has been made on the basis of the existing legislation with more planned, Bernie Fraser, the authority’s chairman, said in the statement. Scaling back the target would lead to only modest decreases in electricity bills through 2030, according to the authority, which was set up on July 1 to give advice to the government on its climate policies.
“Certainty for investors in renewable energy assets is absolutely top of my mind,” Climate Change Minister Greg Combet said yesterday after a speech in Sydney on Oct. 24. “It would take a lot to convince me that there need to be changes in the current renewable energy target settings.”
Australia’s policies to lower emissions and promote clean energy may drive investment of A$100 billion ($104 billion) in the next four decades, Combet said. The government set a price of A$23 a metric ton on carbon emissions for about 300 of its largest polluters for the year that started on July 1, with a market-based system scheduled to begin in 2015.
While “there is a lot to like about the RET,” adjusting the target could reduce power costs by about A$25 billion, Melbourne-based TRUenergy said in a statement in September.
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