The first cut is the cheapest

It's remarkable what a little regulation can do.

Last weekend, the power generation firm Origin Energy advertised for a wind farm project manager and wind farm engineer. Nothing too remarkable about that, it would seem, but for the fact that Origin Energy does not own any wind farms.

Origin nearly built one a few years ago on the Fleurieu Peninsula in South Australia, but was blindsided by city folk who didn't want to have the weekend vistas from their hobby farms interrupted by a series of wind turbines.

But now it is looking at building new wind farm projects in NSW, Victoria and other states, to supplement the wind power it currently contracts from others and its investment in solar and geothermal projects. And with good reason: whether the Coalition is returned or Labor is voted to power, Australia is about to receive a government-mandated boost to its renewable energy sector.

Australia's renewable energy contribution currently stands at less than 10 per cent, but most of this comes from hydro electricity generated from the likes of the Snowy River Scheme, which cannot be expanded. The combined contribution of wind, solar and biomass is around 2.5 per cent, around the same as the UK.

The Coalition has a "clean energy” target of 15 per cent, which theoretically includes "clean” coal and nuclear, but neither of these are expected to be available in Australia by 2020. So its policy mandates an effective trebling of renewable energy sources. Labor has a 20 per cent renewables target, so its policy will effectively mandate a six-fold increase. This could equate to investment of around $20 billion.

Origin and other generators have argued that renewable energy targets are unnecessary and expensive as they only set out to achieve what a properly constructed emissions trading scheme should also deliver.

But this is an argument they are unlikely to win. Clean energy proponents and business lobby groups insist that an ETS by itself might be insufficient – particularly as the structure of the scheme is unknown, including what if any industries are protected – and the political parties are happy to add extra layers of regulation.

The recent IPCC report – and its call for the world to reverse the growing trend in global emissions by 2015 – will only increase the urgency and intensity in government decision making, and reinforce the idea that emissions trading schemes should be supplemented by mandated targets and regulations – be they for overall emissions, renewable energy quotas, or efficiency targets.

The Clean Energy Council, a body that represents more than 400 clean energy businesses, is calling for the Government to implement energy efficiency targets. Energy efficiency is widely regarded as the easiest and cheapest way of reducing emissions, but because of the low cost of energy there has been little incentive for anyone to do much at all, apart from switch off a few more lights in their offices and sort out some obviously inefficient work practices.

The Clean Energy Council wants a five-point plan that includes a $2 billion R&D fund, emissions trading scheme that stabilises emissions at 2000 levels, a guaranteed renewable energy market of 20 per cent by 2020, an energy efficiency target to cap demand growth by a third and reduction of all systemic barriers to clean energy uptake.

Managed properly, the Council argues, the country may be able to avoid having to commission any new coal-fired power stations that would lock the country into increased emissions – at least until "clean coal” technology is developed and proven, by which time it will likely be competing with geothermal, solar thermal and wind and wave energy to provide base load power.

Environment Business Australia, another lobby group, commissioned a report that called for a minimum target of 20 per cent carbon emission reduction by 2020. It outlined how the country could achieve a 60 per cent emission reduction in that time period if the Government mandated reform.

Some 20 per cent could be cut through energy efficiency measures, a further 10 per cent through improved recycling and biomass power, 10 per cent from fuel switching (replacing coal-fired generators with gas-fired co-generators), while renewable technologies such solar thermal, geothermal, solar PV, wind and wave energy could add a further 11 per cent.