This paper is designed to demystify the Renewable Energy Target, look at what it has achieved and what it is capable of achieving, and to consider the challenges it faces in the near future.
Australians love renewable energy. A recent survey by The Australia Institute found 86 per cent of respondents want to see more renewable energy and 79 per cent think governments should support an expansion in renewable energy. There is also very strong support for more electricity generated from hydro (72 per cent), wind (80 per cent) and solar (90 per cent). By comparison, only 11 per cent wanted more electricity generated from coal.
The Renewable Energy Target (RET) is an important driver of renewable energy production. Seventy-one per cent of Australians support the RET. Sixty-eight per cent agreed with its 20 per cent target or thought it should be higher, with only 11 per cent thinking it should be lower.
The federal government has tried to blame rising electricity prices on the RET. But while electricity prices have doubled in the last six years, the RET has played very little part in this – previous reviews and modelling have shown only a three to four and a half per cent rise in electricity prices attributable to the RET.
In fact, a growing number of studies are showing that the RET is likely to put downward pressure on wholesale electricity prices and that this will flow through to retail prices, eventually providing relief to consumers. Among these studies are the preliminary results from the government’s own modelling for the RET review. By 2020, the RET is likely to be decreasing electricity prices not increasing them.