I Group attacks change - Policy shift falls short

Adelaide Advertiser
Saturday 27/2/2010 Page: 86

A FEDERAL Government energy policy shift announced yesterday will not be enough to deliver the large-scale rollout of low-emission power stations needed to combat climate change, investors and energy groups say. Australian Geothermal Energy Association chief executive Susan Jeanes said the policy changes were a step in the right direction but more was needed to ensure Australia wasn't left behind as other countries moved more decisively to roll out clean energy such as solar, wind and geothermal power. Climate change minister Penny Wong said the Government would reform its renewable energy target which forces electricity retailers to source 20% of supplies from renewable energy by 2020.

Clean energy groups had said the Government's earlier decision to include in the target small-scale generation as well as technologies that don't generate electricity, such as water heaters, meant funds weren't flowing to the large-scale energy projects that Australia needs to kick its reliance on planet-warming coal and gas plants that supply 95% of its electricity. Australian companies, such as Brisbane-based GeoDynamics, have cutting-edge technologies for harnessing geothermal or underground heat and for large-scale solar energy plants but face challenges in urgently commercialising them, partly due to the lack of a domestic carbon price or a strong national feed-in tariff that rewards clean energy suppliers.

Ms Wong said the Government would carve the renewable energy target into two bands from January 2011, with a Large-scale Renewable Energy Target to generate the bulk of renewable energy credits, and a Small-scale Renewable Energy Scheme to deliver the rest of the target through solar panels and hot water systems. The changes are estimated to increase the cost of electricity for the average home by less than $4 a year. Simon Schwarz, from Investec Australia said if the Government opted to use the vast bulk of the 20% target for large-scale power projects, it would underpin the economics of wind projects.