Ending renewables uncertainty for business

The incoming Minister for Climate Action, Greg Hunt, is one of the strongest supporters of the Renewable Energy Target in the Australian parliament.

I remember colleagues meeting with him when he was the parliamentary secretary for the environment, when he would sing the praises of the Renewable Energy Target and talk eloquently about the potential for Australia’s clean energy industry. In our many meetings since, he has always struck me as someone who is passionate about building an industry that will literally help power the nation.

I have, of course, often disagreed with the incoming minister, not least on the Coalition’s plans to repeal the carbon price – the most economically and environmentally effective mechanism for putting a price tag on pollution. Disagreements and debates are healthy in a democracy.

Back when he was a parliamentary secretary, Greg Hunt was very keen to build on John Howard’s legacy of creating one of the world’s first mandatory renewable energy targets, and the Coalition actually took a policy to the 2007 federal election to substantially increase Australia’s clean energy target.

Greg Hunt has put his body on the line for the renewable energy industry.

It was only five years ago that Greg Hunt jumped out of a plane to highlight his opposition to the then-government’s decision to slash solar rebates, sending the solar industry into freefall. If ever there was a symbolic action that showed someone understood the dangers of rash government decisions, that was it.

Hunt has also spoken often about the need for certainty for the clean energy industry. In a joint media release with the incoming energy minister, Ian Macfarlane, on March 21 this yeas the shadow ministers stated:

“The Coalition is very much aware of the importance of providing certainty for the renewable energy sector and that any significant change [to the Renewable Energy Target] would create sovereign risk.”

I have written before in Climate Spectator and elsewhere about the perils of uncertainty for small and medium size enterprises like my own, Greenbank Environmental. If disunity is death in politics, then uncertainty is crippling in business.

So spare a thought for Australia’s clean energy industry. In coming months, we’re facing:

– An energy white paper (with the last one completed in 2012);

– A review of the Renewable Energy Target (last one completed December 2012);

– A white paper consultation on the Direct Action Plan;

– A commission of audit with seemingly “everything on the table”; and

– Uncertainty about the repeal of the carbon price and any potential replacement.

For my business, the RET review will have the most direct impact. The last review, completed just nine months ago, was a comprehensive assessment of whether or not the RET was achieving its legislated mandate (it was). It was undertaken by the independent Climate Change Authority, which the Coalition has promised to abolish. While the Coalition has promised to repeat the process, we don’t know when the review will be undertaken and who will undertake it. That creates enormous uncertainty.

We have already seen an investment strike for large-scale renewable energy projects, and my business is feeling the pain of householders cutting back on their investments in residential solar. The renewable energy business community does not need that sort of uncertainty.

My own, strong preference would be for the incoming government to recognise the strength of the 2012 Review of the Renewable Energy Target, including its thorough consultation process, reaffirm its commitment to the RET and delay any subsequent review until the dust has settled on the government’s white paper processes and the future of the carbon price and Direct Action is much clearer.

I am also looking to the prime minister and the incoming Climate Action and Energy ministers to declare their strong support for household solar, acknowledging publicly the action millions of Australians have taken in putting solar on their roofs and the real contribution that is making to reducing Australia’s energy use and greenhouse emissions.

Fiona O’Hehir is chief executive of Greenbank Environmental, Australia’s largest independent trader of renewable energy certificates and other environmental certificates. Fiona has spent six years as an elected industry representative on the board of the Clean Energy Council and is also the vice president of the REC Agents Association.