Compromise plan to push clean energy

The Australian Financial Review, Page: 10
Wednesday, 19 July 2006

Renewable energy generators are pushing the federal government to introduce a mandatory scheme to encourage development of low emission technology, after Prime Minister John Howard again ruled out carbon trading. The scheme is being pushed as a first step towards a carbon price signal and as a replacement for the 2001 Mandatory Renewable Energy Target , which has been achieved. The Renewable Energy Generators of Australia and the Australian Wind Energy Association are behind the push and expected to present detailed modelling to the government within weeks. One option is to only include energy retailers and generators in the first phase of the scheme, so as not to damage energy-intensive industries such as cement and aluminium.

It may also involve a tradeable certificate that will reward low emission technologies such as dean coal, natural gas, wind, solar and biomass. Mr Howard outlined his vision for Australia's energy future on Monday and said the country would take a pragmatic view to policy and not introduce renewables at the expense of the economy. He branded a state government plan to introduce emissions trading as irresponsible and said it could hinder Australia's ability to become an energy super power. But the state Labor premiers are not backing down and plan to push on with a trading scheme which could be introduced as early as 2010. The proposal by the renewable energy generators is thought to have some support from a section of the coal industry, which has acknowledged a price on carbon is required to develop clean-coal technology.

It is seen as a compromise to a broad-based emissions 'trading scheme, which will penalise all polluters equally and is strongly opposed by energy-intensive industries. Victoria introduced plans for a similar mandatory target on Monday, which will require the state's energy retailers to source 10 per cent of their power from renewable sources by 2016. The plan received an immediate boost yesterday when Acciona Energy announced the first stage of a $400 million wind farm investment near Ballarat. Roaring 40s Renewable Energy also said it was reviewing its farm in south-west Victoria.

But the state government's claim that it would have a minimal impact on power bills, costing the average family less than $1 a month, has come under fire from the Energy Users Association. An Access Economics study shows it will raise costs by up to 5 per cent and have a negative impact on energy-intensive industries.