Thursday, November 01, 2007

SPIN DOCTOR: Everyone loves renewable energy, again

"Much as it won’t boast about it, the Coalition has actually has the best record when it comes to introducing mandatory renewable energy targets, one of the best in the world."

Do you want your electricity manufactured in wind farms?

You are voting for the right party.

On Monday Labor promised that that 20 per cent of Australia’s electricity would come from renewable sources by 2020.

The Greens had already promised 15 per cent by 2015, and the Coalition 15 per cent by 2020...

The Coalition’s target differs from the other two in that it also allows for the inclusion of so-called “clean coal” power where the carbon dioxide released when the coal is burnt is captured and stored underground, a process that has not yet been shown to work on a commercial scale.

It’s also an easiest target to meet. Around 8 per cent of our electricity already comes from renewable sources (mainly hydro) and legislated targets being adopted in NSW and Victoria will push us towards the Coalition’s 15 per cent anyway.

But, much as it won’t boast about it, the Coalition has actually has the best record when it comes to introducing mandatory renewable energy targets in Australia, one of the best in the world.

Very early in his government in 1997 the Prime Minister trumped his Labor predecessor with an impressive package entitled “Safeguarding the Future: Australia’s Response To Climate Change”. Among the measures was one of the world’s first mandatory renewable energy targets that required generators to take an extra 2 per cent of their power from renewable sources by the year 2010.

So successful was the target that within 2 years of its adoption in 2001 more than 190 renewable power stations had been accredited and it became clear the target would be achieved early.

According to the leaked notes of a senior executive of Rio Tinto obtained by the ABC, John Howard’s Industry Minister Ian Macfarlane told an industry gathering in 2004 that the scheme had "worked too well”.

In 2003 an indpendent inquiry chaired by a former Coalition Senator had warned that “by 2007 sufficient capacity is expected to have been installed to meet the target. As a consequence, investment is expected to fall away rapidly."

It recommended doubling the target and extending the scheme to 2020.

The Coalition rejected the recommendation and much of Australia’s renewable energy industry went offshore.

It has to gear up from something of a standing start to meet the new targets and new wind farms are the easiest way to do it – lots of them.

Economic modeling conducted by McLennan Magasanik Associates for the Renewable Energy Generators of Australia suggests that the targets put little upward pressure on electricity prices, even potentially cutting wholesale prices in the early years as a result of a build up in generation capacity.

Yesterday’s headline talked of an increase in power bills for a family of four of $40 a year, but that is what the modeling projected for 2020, “the year in which the price impact peaks”, after that it should be lower or even negative if it helps electricity companies get into zero emission technologies early ahead of carbon taxes and carbon trading.