Renewable energy target costs will fall, says CEC by Giles Parkinson

The Clean Energy Council has kicked off what is expected to be a last-minute rush of submissions to the critical review of the 20 per cent Renewable Energy Target, challenging notions that the scheme is expensive.

The CEC says in its submission that meeting the cost of the RET – the fixed goal of 41,000GWh – will result in around $13 billion of new investment, but will add as little as 1 per cent to household electricity bill.

The submission seeks to counter a lot of the recent media play, pushed by gas and coal generators and their owners, including large utilities and conservative state governments, that the LRET is expensive, should be scaled down, or even that it is not required given the carbon price.

In contrast to TRUenergy, which produced a report from ACIL Tasman last week that suggests the RET will cost $53 billion, and could be halved if the target was made a floating one rather than a fixed one, the CEC says the cost of the scheme contributes just 7 per cent to the average Australian electricity bill, and this is forecast to reduce to just 4 per cent by 2020.

It  says the cost of the large scale component is anticipated to be between 1 and 3 per cent of household bills by 2020, and the cost of the “small scale scheme”, which provided certificates to encourage smaller technologies such as rooftop solar, would also fall dramatically over time.

“The cost of RET is small and getting smaller, especially when combined with action on energy efficiency,” the CEC says in its submission. It notes that the RET has helped reduce the cost of renewable technologies in Australia, particularly in rooftop PV, had helped reduce demand, and had helped lower wholesale energy prices.