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Australia’s Renewable Energy Target –Judgements on PolicyDevelopment Processes
GENEVIEVE SIMPSON, PHD CANDIDATE
The University of Western Australia
Outline
Outline Renewable Energy Target Review processes Analysis of Review submissions Issue 1: RET Target Value Issue 2: Appropriateness of Review processes Issue 3: Solar Credits Multiplier Issue 4: Maintenance of status quo Conclusion
Victor Habbick, FreeDigitalPhotos.net
The University of Western Australia
Renewable Energy Target Annual Renewable Generation
Mandates a percentage of annual electricity generation from ‘clean’ sources
Supports small and large-scale generation
Initiated 2001– 9,500 GWh Expanded 2009 – 45,000
GWh Separated 2011 – 41,000
LGC, 4,000 STC Incr. renewable capacity
from 10,650 to 19,700 MW BREE, 2012 Australian Energy Statistics, Canberra, 2012Climate Change Authority, Renewable Energy Target Review -
Final Report, Canberra, 2012
The University of Western Australia
Legislated Review of RET
‘Tambling Review’ in 2003:• Recommended increasing RET Target Value• Noted harmful effects of concurrent/repetitive review processes• On-going commitment to status quo
‘Potentially the most comprehensive overview of the status of Australia’s renewable energy industry’
(Kent & Mercer, 2006, Australia's Mandatory Renewable Energy Target (MRET): An Assessment, Energy Policy, 34, 1046-1062)
‘Climate Change Authority Review’ in 2012:• Same issues?• New issues?
The University of Western Australia
Review Stakeholder Submissions
8,660 submissions 160 unique, 2 campaigns Stakeholder details recorded Issues of interest:
• Support or reject value of RET
• Review of Target value• Effects of continual
review processes• Uncertainty in legislation• Perceptions of
embedded policies, e.g. Solar Credits
Limitations?
The University of Western Australia
Issue 1: RET Target – Fixed or Variable Percentage?
RET Target Value can be:• Fixed GWh, flex %• Fixed %, flex GWh
17% requested increase 14% requested reduction
to new demand 63% requested no change 6% requested abolishment
(N=132) ‘Policy certainty required!’ Why was it reviewed?
The University of Western Australia
Issue 2: To Review or not to Review?
Review required in legislation Length of time between reviews optimal? 77% respondents – more than 2 years between reviews 9% respondents – no change to legislation 60% respondents – future reviews should maintain policy certainty
(N=70) ‘Review fatigue’ - 10 reviews related to RET in 5 years Interaction with Carbon Price still unclear
‘Constant review is not reform’
The University of Western Australia
Issue 3: Solar Credits Multiplier for small-scale solar
Replaced Commonwealth rebate Initiated 2009 – 5 x multiplier, reduced yearly Scheme oversubscribed Multiplier reduced ahead of time 18% respondents noted scheme resulted in substantial investment
(N=68) 87% noted negative impacts / would not support use of multiplier Issues include:
• Phantom Certificates• Boom-bust cycles• Certificate overhang
The University of Western Australia
Issue 3: Solar Credits Multiplier for small-scale solar
Phantom Certificates
Multiplier creates certificates with no renewable potential
26% noted concern with phantom certificates
‘Target should be increased to account for phantom certificates’
The University of Western Australia
Issue 3: Solar Credits Multiplier for small-scale solar
Boom-bust cycles
Rushed purchasing behaviour to take advantage of high rebates
13% experienced boom-bust cycle
Reduced installation quality
Bankrupted businesses
The University of Western Australia
Issue 3: Solar Credits Multiplier for small-scale solar
Certificate overhang
Increased small-scale adoption = reduced demand = reduced price for certificates = mass purchasing by retailers
26% noted overhang
‘Certificate overhang expected until 2016’
The University of Western Australia
Issue 4: On-going commitment to status quo
34 recommendations by Climate Change Authority
11 proposed changes Only 6 accepted:
• 3 administrative• 1 to be enacted 2017• 1 helpful to industry• Years between
reviews doubled
The University of Western Australia
Conclusions:
Stakeholders were most concerned with maintaining policy stability• Maintain Target value• Reduce the number of review processes
Solar Credits Multiplier:• Increased adoption• Had negative outcomes for small and large-scale industry, environment
Government chooses to maintain status quo Scheme would be improved by:
• Maintaining policy consistency for industry certainty• Only consulting where there is an intention to change• Removing embedded schemes
Victor Habbick, FreeDigitalPhotos.net