Will Lambie defy Clive to kill the RET?

Senator Jacqui Lambie has indicated that she is inclined to vote with the government to make changes to the RET in defiance of her party's leader Clive Palmer.

This comes as the Palmer United Party sacked Lambie's chief of staff and former Nationals MP, Rob Messenger, and Clive Palmer called on Lambie to challenge him for the leadership of PUP.

The Guardian reports that Lambie said today, “Clive's deal with Al Gore with regard to RET is just that – a deal with Clive Palmer, who did not consult with me as to how much harm it will cause to Tasmanian businesses' profitability or workers' job security.”

The Tasmanian senator suggested that she might be willing to trade off voting for the government's proposed 40% cut to the Renewable Energy Target if the government was prepared to offer a higher pay rise for defence force personnel, saying the scheme must be “dramatically changed”.

This follows similar comments she made in an interview on Wednesday night on the ABC's 7.30, detailed below:

LEIGH SALES: Clive Palmer says that the Palmer United Party won't do a deal with the Government on the Renewable Energy Target. Is that your position also?

JACQUI LAMBIE: Well first of all, the deal will need to be done in relation to the Australian Defence Force, their pay and their Christmas holidays before I negotiate any further or do any negotiations with the Coalition. You know, I've already spoke to Greg Hunt about this and he's very - he's very aware of my intentions when it comes to the vote on the RET, but - and I'm quite sure he shares that with Tony Abbott. That might help get those Defence personnel back what they deserve.

LEIGH SALES: Are you prepared to have individual discussions with Greg Hunt about the RET or are you simply going to toe the Palmer United Party line on that?

JACQUI LAMBIE: Oh, no, I'm absolutely prepared to go outside the square there, because once again, it comes down to my conscience and it comes down to Tasmania. The Tasmanian people voted me in and I have to do what is right by the Tasmanian people when it comes to the RET. And right now, my opinion may not line up with Clive Palmer's opinion.

Lambie's position is clearly influenced by lobbying from less than a handful of energy-intensive facilities in Tasmania most likely the Bell Bay Aluminium smelter, the Hobart-Risdon Zinc Smelter and the TEMCO manganese smelter. These are all being offered by the government a complete exemption from any costs associated the Renewable Energy Target if a deal can be done to pass changes to the RET legislation.

In the past, Lambie has said she wanted Tasmania exempted from the RET, which would actually be a major problem for one of Tasmania's larger employers – Hydro Tasmania – if it were then no longer eligible under the scheme. Hydro Tasmania generates significant amounts of revenue via the sale of renewable energy certificates from both its hydro facilities and also wind farms, including the very recently constructed Musselroe wind farm.

Yet an interesting but little noticed result of the modelling by ACIL-Allen for the Federal government suggested that hydro generators may, in fact, be net financial beneficiaries of a deal to cut the Renewable Energy Target. The ACIL Allen report notes:

Interestingly, existing hydro is also better off in net terms from repeal of the scheme with higher wholesale prices more than compensating for the forgone LGC revenue (the majority of hydro generation comes under the pre-RET baseline and is therefore excluded from the LRET).

It may be that while Lambie is hearing loud and clear complaints from a small number of energy-intensive facilities, Hydro Tasmania is not as vigorous in pointing out the potential opportunities for growth of renewable energy in Tasmania.

Nonetheless, even if Lambie were to vote for the government's proposed 40% cut to the target, the government does not yet have the number of senators it needs.

The Coalition has 33 senators and needs a further six to pass legislation.

It would be assured of Bob Day and David Leyonhjelm's votes who both reject the climate science for fear it might conflict with their desire for smaller government.

Madigan is also likely to vote for reductions to the large-scale Renewable Energy Target due to his distaste for wind farms.

Lambie then makes four.

Xenophon is harder to judge, but he is heavily influenced by Frontier Economics' Danny Price who is known to back cuts to the target and has also been hostile to wind farm developments. In a recent public forum Xenophon refused to rule out voting for legislative changes to reduce the target.

If Xenophon was brought on board then the government just needs one further senator to break ranks out of the PUP-Motoring Enthusiasts bloc. Ricky Muir recently reassured a group from Solar Citizens that he would block changes to the RET. So if Glen Lazarus and Dio Wang remain loyal to Clive Palmer then the government still lacks the numbers to reduce the target.

But Clive Palmer and his party appear to be anything but predictable.