Changes to RET scheme

The federal government announced last week that it will be dividing its Renewable Energy Target scheme into two parts: the Small-scale Renewable Energy Scheme (SRES) and the Large-scale Renewable Energy Target (LRET).

From 1 January 2011, the LRET, covering large-scale renewable energy projects like wind farms, commercial solar and geothermal, will deliver the vast majority of the 2020 target (ie, 20% of Australia’s energy in 2020 to come from renewable sources). This will free these projects from uncertainties that may have been caused by strong demand for small-scale renewable technologies.

The SRES will cover small-scale technologies such as solar panels and solar hot water systems and deliver the remainder of the target. It will provide a fixed price of $40 per megawatt hour of electricity produced, providing direct support for households that take action to reduce emissions.

Most environment groups have welcomed the proposed changes to the scheme. Environment Business Australia CEO Fiona Wain has said, “This gives clarity to investors that the RET will encourage large-scale renewable energy projects. Separating large-scale and small-scale renewable energy projects signals that Australia has confidence that existing and emerging technologies can deliver large-scale renewable energy projects."

EBA is proposing that renewable energy be scaled up over time to include manufacturing and minerals processing as well as baseload electricity. Planning for combined renewable energy sources such as geothermal, wind, marine and solar thermal with a high voltage direct current (HVDC) grid and smart grid connectors could see Australia emerge as an international powerhouse for clean energy and satisfy growing market demand for green goods and services.

"Renewable energy is one of five key approaches we have identified to building the new markets, new industries and new jobs that will underpin Australia's next competitive edge," added Fiona Wain.

The other approaches identified by EBA are:

• Economy-wide energy, materials and resources efficiency;
• Smarter cities and transport systems;
• Two biosequestration (Bio-CCS) projects: drawing legacy carbon from the atmosphere and rebuilding agricultural soils; and capturing CO₂ from coal-fired power plants and using algal synthesis producing diesel, animal meal, plastics and soil fertiliser.