Deal reached on renewable energy scheme

Age
Wednesday 23/6/2010 Page: 5

Projects such as wind farms and solar power plants are set for a boost after the federal government, the Coalition and Greens struck a deal to fix Australia's renewable energy scheme. Flaws in the original design of the target - meant to ensure 20% renewable energy production by 2020 - favoured small-scale technology such as rooftop solar panels, putting billions of dollars in investment in large-scale clean projects at risk. This resulted in changes that ensure 18% of Australia's energy will come from largescale renewables by 2020.

Household products such as rooftop solar panels will be left uncapped under the target, meaning Australia could potentially exceed the 20% target. But under a deal reached yesterday, reviews will be put in place that could mean households will get less money from the government to install solar panels in an attempt to limit the amount of renewable energy generated by small-scale renewables under the target.

Those reviews include potentially lowering the fixed price of renewable energy credits generated by solar panels and hot water systems - currently $40 - and giving households less credits than currently offered for their renewable energy generation. The changes to household compensation will not come in immediately and were made because of fears the rocketing uptake of household renewables would again crash the price of certificates for large-scale projects and impose extra costs on big business.

The changes to the renewable energy target is expected to pass the Senate today, with a number of additional amendments from the opposition and Greens also up for voting. The renewable energy deal comes as environment group Beyond Zero Emissions and University of Melbourne's Energy Institute released joint research showing Australia could generate all of its electricity through renewables by 2020. Under the 100% renewable energy plan, Australia would be powered by 60% base-load solar thermal plants with storage capacity and 40% wind power. Hydro and biomass electricity would be used as backup. It is estimated the plan would cost $37 billion a year in public and private funding.