Howard’s green-tape cut

A move to replace state renewable energy schemes with a single national clean energy target announced by Prime Minister John Howard yesterday could mean significant cost savings for the multi-billion dollar renewable energy sector, an industry spokeswoman says.

Under the new national clean energy target, 30,000 gigawatt hours of power per year will have to come from low emission sources by 2020, an amount that will be equal to around 15% of all energy generated.

Any energy source that emits less than 200 kilograms of greenhouse gases per megawatt of electricity generated will qualify under the target. Controversially, this means coal fired power that uses carbon capture-and-storage may count as “clean” for the purpose of the scheme, along with traditional renewable energy sources such as solar and wind.

The national scheme will replace a variety of different state schemes and territory renewable energy programs, but according to Renewable Energy Generators of Australia chief executive Susan Jeanes, the 30,000 gigawatt annual target will represent an improvement over the various schemes it will replace.

And, Jeanes says, while current state programs have worked well, there will inevitably be cost savings associated with the move to a singe national scheme.

“There is no doubt it will reduce red tape – the state schemes are great, have focused on getting the cheapest renewable energy available, but certainly bringing them all under one scheme will help the industry and create cost savings on the paperwork side of things,” Jeanes says.

The national scheme should boost investor confidence in the sector and result in a more efficient use of capital in the industry, which currently has assets of over $15 billion in Australia and employs around 15,000 people.

“At the moment you might go to Victoria to build a wind farm because the incentive is there to do that, even though conditions in another state might better suit that form of energy generation,” Jeanes says. “That shouldn’t happen any more, and those efficiencies will help attract developers and get more schemes off the ground.”

But Fiona Wain, chief executive of think-tank Environment Business Australia, says the national scheme won’t do anything to boost renewable energy targets and won’t make a substantial difference to Australian emissions levels.

“The urgency of what is facing us has really got to be taken seriously, and this measure just doesn’t do that,” Wain says.

“The minute that anybody talks seriously in energy terms about targets going forward gives more certainly and clarity of intent to investors and that is a good thing, but this is not a big step and more drive is needed to meet the challenges ahead of us.”