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Treasurer Joe Hockey recently said he found the sight of a wind farm 'utterly offensive'. Photograph: AAP Photograph: AAP
Treasurer Joe Hockey recently said he found the sight of a wind farm 'utterly offensive'. Photograph: AAP Photograph: AAP

Clean energy sector ‘on hold’ while government reviews renewables target

This article is more than 9 years old

Investment in the industry is almost at a standstill as uncertainty grows over the Coalition’s commitment to renewable energy

More than $5 billion was invested in Australian clean energy last year but the sector has virtually ground to a halt owing to widespread anxiety over the government’s commitment to renewables, according to the industry body.

In its analysis of renewables in 2013, the Clean Energy Council found that nearly 15% of Australia’s power was produced by renewable energy, with $5.18 billion invested in the sector.

The industry now employs more than 21,000 people, with last year seeing the launch of the 140-turbine Macarthur wind farm, the largest of its kind in the southern hemisphere.

But the government’s current review of the Renewable Energy Target, which mandates that 20% of Australia’s power must come from renewable sources by 2020, is likely to result in a drop-off in investment in 2014, the Clean Energy Council warned.

The council’s report warns that Australians’ electricity bills will increase by up to $1.4 billion each year beyond 2020 if the RET is removed, with the review “creating uncertainty for the industry and eroding investor confidence”.

The review is headed by Westfield chairman Dick Warburton, who has publicly questioned the science of climate change. Several Coalition MPs have called for the RET to be scrapped in order to bring down power bills, while treasurer Joe Hockey recently took aim at the renewable industry itself, saying he found the sight of a wind farm “utterly offensive.”

“There is certainly a lot of nervousness and anxiety based on some of the comments that have been made,” Kane Thornton, deputy chief executive of the Clean Energy Council, told Guardian Australia. “The industry is very much on hold at the moment and we’d expect investment to be down this year.

“We are sitting nervously at the moment. We want this review to be conducted as quickly as possible.”

Thornton said he was hopeful that the RET review panel would realise that the benefits of the scheme outweigh its “modest cost”, which has been estimated as adding around 3% to energy bills.

A consultancy picked by the government to assess the cost of the Renewable Energy Target has found that cutting back the scheme would result in higher costs for households.

ACIL-Allen's draft findings reveal that household consumers will be better off by a net $232 a year by 2030 as a result of the target.

A separate report released on Tuesday by the Australia Institute calculated that state governments have handed subsidies worth $17.6 billion to the fossil fuel industry over a six-year period.

Thornton said should the RET be drastically altered “you’d have to ask serious questions over whether we’ve got the balance right in terms of government assistance. Sometimes people are a bit mischievous in not recognising there are incentives for the fossil fuel sector, as there are for the renewable energy sector.”

According to the Australia Institute analysis, Queensland has provided the greatest help to the mining industry with a total of $9.5 billion, followed by Western Australia at $6.2 billion.

This assistance is provided in various ways, from direct “assistance packages”, discounted access to services or infrastructure built primarily to aid the resources sector.

The Australia Institute said the assistance, which doesn’t count federal government aid, was “massive” and could be used to fund schools or hospitals.

“That billions of dollars have been poured into companies which for the most part are foreign-owned is even more alarming in light of the recent budget cuts to average Australians,” said Richard Denniss, executive director of the Australia Institute.

“This report shows that Australian taxpayers have been misled about the costs and benefits of this industry, which we can now see are grossly disproportionate.

“These subsidies demonstrate that the economic argument for these industries is fundamentally flawed – Australian taxpayers are funding mining at the expense of crucial public services like education, health and police.”

But the mining industry disputes the Australia Institute’s findings, with NSW Mining, the industry’s peak body in the state, calling the report “dodgy” and “desperate”.

“Even if the Australia Institute’s findings were accurate, the taxpayers of NSW are receiving mining royalties valued at over $1.3 billion each year – around ten times the amount the Australia Institute claims the industry receives in ‘subsidies’,” a spokesman said.

“It's time the Australia Institute was recognised for what it is – an anti-mining, pseudo-political organisation dressed up as a think-tank.”

More on this story

More on this story

  • Wind and other renewables generated a fifth of Britain's electricity in early 2014

  • Spending watchdog criticises ministers over £16bn renewable energy deals

  • UK and Germany break solar power records

  • Department of Energy admits arithmetic gaffe in legislation draft

  • Green investment bank to launch £1bn offshore wind fund

  • Renewable energy won't rid us of the horrors of coal

  • Pessimism won’t do. We need an energy revolution

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