Renewables industry calls the government's bluff

The Clean Energy Council issued a statement yesterday telling Ian Macfarlane they're not interested in volunteering themselves to be sacrificed. It reflects a belief that while the government talks tough, they are in fact weak and vulnerable on the RET.

The Castle’s Dale Kerrigan would have been proud.

In an act akin to Dale urging his lawyer to "tell ‘em to get stuffed", yesterday the Clean Energy Council – which represents the renewable energy industry – put out this statement:

The federal government has not convinced the industry or the public of a need to change the Renewable Energy Target and should leave it alone, the renewable energy industry’s peak body said today in response to comments from Industry Minister Ian Macfarlane.

As Climate Spectator has covered over each day this week, Macfarlane has been attempting to portray the Coalition as a strong supporter of renewable energy and distancing the government from the Warburton Review’s recommendation that the RET be wound-up.

Yet, while still trying to sound like he’s the renewable energy sector’s best friend, he has been simultaneously delivering a veiled threat that the industry must bring Labor to the table to agree to a major, but unspecified, cut in the target. 

The suggestion seems to be that the renewables industry will get nothing if it doesn't quickly concede to an agreement that would see the level of new renewable energy development cut by 60 per cent.

But the renewables industry appears to have decided to call his bluff, stating that it would prefer regulatory uncertainty to what appears to be currently on offer. 

This seems like a rather bold move, given many in the Coalition – including the Prime Minister and the Treasurer – have made little secret of their disdain for the Renewable Energy Target and renewable energy generally.

But if you play close attention to the public rhetoric and the backroom private chatter, there has been a clear shift in the last few weeks. Backbenchers are out on in the media trying to reassure the public that they like renewables and that they won’t be abolishing the RET.

What is particularly intriguing is that in recent days Macfarlane has been trying to rewrite history – to play down the significance of the government's decision to review the RET. In his CEDA speech on Wednesday, the Industry Minister made the following statement:

"The requirement for a review every two years was included in the original legislation, at the request of the renewable energy industry and supported by the then Labor Government. The Coalition agreed to this requirement in response to the industry request."

This is, at best, tricky. If not downright dishonest. Kane Thornton – chief executive of the CEC and someone deeply involved in negotiations surrounding the shape of the RET since 2007 – told Climate Spectator:

The renewable energy industry did not request or support the inclusion of two-yearly RET reviews in the RET legislation. We have consistently asked for this to be removed from the legislation, given the impact of review on the industry and investment confidence.

Even if there was a breakdown in communication in 2010 leading Macfarlane to believe the clean energy industry might like the legislation underpinning billion-dollar investments to be up for grabs every two years, he certainly should have been disabused of that notion by 2012. In the prior 2012 review of the RET, by the Climate Change Authority, stakeholders were specifically asked whether reviews of the scheme should continue to occur every two years. The response was a loud and universal ‘stop the reviews’ from renewable energy businesses.

So why would Macfarlane make such a misleading statement?

Thanks to Tony Abbott’s brainwave to appoint an avowed climate science denier as well as a mining industry attack-dog to review the RET, the government has been 'outed' as being in bed with big energy companies to destroy the renewables industry. This image is playing extremely badly in the electorate.

The Save Solar campaign has led to Coalition MPs being bombarded by angry letters and meetings with local constituents, asking why the PM wants to destroy renewable energy. If these MPs didn’t already realise that solar was incredibly popular in marginal and regional electorates, they sure know it now (it is common for 20-30 per cent of households in marginal seats to have solar systems). 

In addition, it is now privately acknowledged by a range of government MPs that the Warburton review has been greeted by the media as a stitch-up job to help owners of coal-fired power stations, not electricity consumers.

The Coalition is now desperately trying to change its image.  

So when Macfarlane says that he is the renewables sector’s best friend but that the renewable energy industry must kowtow to his mercy, the sector doesn’t see strength but, rather, weakness. What Macfarlane is trying to do is set up an arrangement where the government can make large cuts to the RET but have it appear as if it’s not the government’s doing.

Macfarlane’s threat is seen as an empty one. The Coalition wasn't prepared to be upfront with the electorate in the last election about its intention to cut the RET when they were a shoe-in to be elected. Now they are behind in poll after poll, so why would they have more courage this time around?

It appears that the government will have to offer something an awful lot better than its preferred position of slashing the target for new renewable capacity by 60 per cent if it wants this issue to go away quietly.

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free

Related Articles