This report argues that Australia's 20 per cent Renewable Energy Target has delivered $18.5 billion in investment, with the potential for $18.7 billion more if the policy is retained in its current form.
A target mandating the purchase of new renewable energy generation by retailers has been in operation in Australia since 2001. The Renewable Energy Target (RET) scheme is being reviewed by the Climate Change Authority this year.
To inform this review, the Clean Energy Council engaged the consultancy firm SKM MMA to undertake an analysis to:
1. Review the outcomes of the RET to date
2. Project the future impact of the RET
3. Understand the implications of stopping the RET
The electricity markets across Australia were modelled with and without the RET as well as other sensitivities, and past and future impacts were investigated. Impacts on investment in renewable energy and fossil fuel generation, wholesale and retail electricity prices and emissions abatement were examined in this study. There were also no reliability or security of supply issues identified in the analysis undertaken. The outcomes presented in this report are focussed on the RET impacts. Other complementary measures such as Green Power, feed-in-tariffs and the carbon price have, and are expected to continue to have an impact on the renewable energy industry.
The modelling shows that:
Between 2001 and 2012:
- The RET has delivered $18.5 billion of investment in renewable energy infrastructure
- Wholesale energy prices are as much as $10/MWh lower as a result of the RET being in place
- Emissions are 22.5 Mt CO2e lower as a result of the RET.Without the RET Australia would not have met its emission reduction target under Kyoto
Between 2012 and 2030:
- By itself the RET is expected to deliver an additional $18.7 billion of investment in renewable energy infrastructure.
- Wholesale energy prices are expected to be up to $9/MWh lower with the RET in place
- 1000 MW less gas fired generation capacity is expected to be required with the RET in place
- Generation from gas-fired power stations is expected to be 13% less with the RET in place
- Generation from coal-fired power stations is expected to be 12% less with the RET in place