Moderation way to go: retailer-generator TRUenergy

Age
Monday 29/9/2008 Page: 2

THE Federal Government needs to adopt a moderate emissions reduction trajectory, and support for a renewable energy target must be maintained, says energy retailer and generator TRUEnergy. In its submission to the emissions trading green paper, TRUEnergy says incentives need to be provided to encourage renewable energy investment on top of the Government's commitment to start its carbon pollution reduction scheme in 2010.

The Government has committed to extending its mandatory renewable energy target scheme (MRET) to require that 20% of Australia's electricity supply conies from renewable energy sources by 2020. TRUEnergy managing director Richard Mclndoe told BusinessDay he would wait for Treasury to release its economic modelling next month.

But he said a trajectory similar to government adviser Professor Ross Garnaut's 10% reduction in emissions by 2020 would be appropriate. TRUEnergy has matched the Government's commitment to reduce its emissions by 60% by 2050. Mr Mclndoe said the uncertainty around an emissions trading scheme had made it difficult to get funding for low emissions investment. "For the last 18 months it has been almost impossible to get any traction with board and bankers in investing in large capital projects because we don t know what the trajectory is going to be and we don't know the price," he said.

"It is starting to compromise the viability of those new investments because if you wait too long your existing assets start to deteriorate." He said it was unreasonable to expect generators to turn around their emissions profile immediately after the Government's white paper is published at the end of the year. "A moderate trajectory would be the sensible policy because you have MRET which is bringing that new technology into the market," he said.