Macfarlane's ridiculous RET negotiating position

Ian Macfarlane is trying to switch the onus of RET negotiations to Labor, and the industry, to come to him. But given it is his government that wants to change the law, shouldn't he detail what needs to change and the problem it will solve, besides improving coal generators' profits?

As discussed in my column yesterday (Why Macfarline is dreamin'), Industry Minister Ian Macfarlane is telling everyone, except the Labor Party itself, that he’s keen to work with Labor to ensure a stable and conducive environment for renewable energy investment.

His comments across the last week seem keen to reset the tone away from the one set by Tony ‘when the wind don’t blow, the power doesn’t flow’ Abbott and Joe ‘I find wind turbines utterly offensive’ Hockey.

In speech given to a CEDA function yesterday, Macfarlane said “... no one is advocating the end of renewable energy in Australia” and that there were no plans to scrap the RET. He also said that “regardless of what decisions are made about the RET, nothing will change for those who have installed rooftop solar, and large-scale investments – such as wind farms or hydro power stations – will be protected”.  

Also, Macfarlane now seems keen to claim $1 billion of investments made by the Australian Renewable Energy Agency as something the Coalition initiated. This is even though the Coalition had nothing to do with most of them and, as we speak, is seeking to have the agency abolished in the Senate.

Yet – at this stage – all the minister seems to be putting on the table is a threat: that unless the renewables industry accepts a very big cut to the target, and persuades Labor to be a signatory to it, then the Coalition will leave them in a regulatory limbo land.

Macfarlane isn't saying precisely how big the cut needs to be but it's pretty obvious he wants something close to the 20 per cent market share scenario set out by the RET Review. 

Even though it is the Coalition that is seeking to change the law, he made the claim in the speech yesterday:

“... the only threat to the RET will come from the Opposition if it chooses to play politics with the issue, instead of continuing the long-standing bipartisan approach of negotiating on renewable energy policy. It’s up to the Labor Party to decide whether it wants to be part of ensuring the RET scheme is working as intended … or the Labor Party may choose to be political, obstructionist and ultimately act in a way that undermines renewable energy in Australia.”

In chatting to a range of participants in the sector, they’re all rather bemused by this. Here is a government that wants to change a law which was voted for not just by Labor, but also the Coalition's parliamentarians. In the second reading speech accompanying the legislation which the Coalition voted for, it clearly states that it is expected that the scheme will ensure at least 20 per cent of power from renewable energy and most likely more.

Yet Macfarlane is suggesting that it is the fault of Labor that a bipartisan consensus has unravelled – because he’d like to change the law due to there being insufficient demand to keep all the fossil fuel generators busy. But this has nothing to do with the objectives of the RET legislation; indeed, it's contrary to its objective (to lower emissions). At the same time, what is the major problem for the community that we are seeking to avoid by relieving the oversupply via reducing the RET? Improved reliability, reduced prices, or reduced environmental impact – no on all these counts and, in fact, the very opposite.

In speaking to a renewable energy representative, one is struck by the same sentiment:

‘It’s the government that wants to change the law, so the onus is on them to make a case for what the change needs to be and why. They said it was all about electricity prices and now their own review shows that isn’t a justification for change. The review hasn’t given them anything useful but somehow it’s up to us to volunteer ourselves for sacrifice.’

Macfarlane and the Business Council of Australia are now arguing that Labor and the renewables industry must give in to their demand to cut the target for new projects by 60 per cent or else cop the blame by voters for a spike in power prices in 2016. This will, apparently, be caused by retailers paying a $93 penalty due to a shortage of renewable energy certificates to meet the renewable energy target, thanks to uncertainty haltering investment in new renewables. This is unlikely by 2016, yet the only reason this would happen is because the government was threatening to change the law.

Is the electorate likely to blame Labor for this or are they more likely to blame the government that’s in charge?