Australia Revises Renewable Energy Target Plan

On February 26, Australia’s Minister for Climate Change and Water Penny Wong, and the Minister Assisting the Minister for Climate Change Greg Combet, announced that the government would make changes to the country’s Renewable Energy Target plan. Starting in January 2011, the existing scheme will include two parts – the Small-scale Renewable Energy Scheme (SRES) and the Large-scale Renewable Energy Target (LRET).

These revised arrangements will deliver on the Government’s 20 percent by 2020 Renewable Energy Target (RET) and are expected to enhance the scheme by providing greater certainty for households, large-scale renewable energy projects and installers of small-scale renewable energy systems like solar panels and solar water heaters. Combined, the new LRET and SRES are expected to deliver more renewable energy than the existing 45,000 gigawatt-hour target in 2020.

The LRET portion of the target will be increased to ensure the 20 per cent by 2020 target is still met if the uptake of small scale technologies is lower than anticipated. The new LRET annual targets (to commence in 2011) for large-scale renewable electricity generation are listed in the table below.

The new SRES has been designed to deliver households, small business and community groups, $40 for each Renewable Energy Certificate (REC) created by small-scale technologies like solar panels and solar water heaters.

Under the existing Solar Credits initiative, the new fixed price of $40 per REC will see a Sydney household that installs a 1.5 kilowatt solar panel system in 2011 benefit from an upfront subsidy of $6,200 through RECs. If the same household decides to install a typical solar water heater they will receive RECs worth $1,200.

The number of systems receiving support under the SRES will be uncapped to ensure small-scale installers have certainty. The Government will review the operation of the SRES in the context of the planned 2014 statutory review of the Renewable Energy Target.

“The Rudd Government has got it right with this announcement,” said Matthew Warren, chief executive of Australia’s Clean Energy Council. “The clean energy industry has been discussing structural design issues with the current Renewable Energy Target since late last year. The Rudd Government has listened carefully to industry advice and today has acted decisively and effectively. Our main concern was to improve the design of the RET to ensure that it delivered both industrial scale generation projects as well as the continued development and deployment of household technologies like solar panels and hot water. Today’s announcement addresses this problem. We will continue to work with the government to ensure the final legislation is effective and efficient.”

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