Labor’s rising Renewable Energy Target (RET) have undermined the country’s economic growth and saps exports, putting thousands of jobs across Australia at risk, a new report reveals.
According to The Australian, a new analysis by Deloitte Access Economics — commissioned by the Australian Chamber of Commerce and Industry and the Business Council of Australia — have found that keeping the RET is costing the Australian economy approximately $34 billion, including nearly $3 billion cut in exports by 2020.
The RET has forced electricity retailers to source a growing portion of energy from high-cost wind farms, which is expected to lead to the loss of 4900 full-time jobs by 2020 and more than 6000 by 2030. This has translated into higher electricity prices, undermining the competitiveness of the economy and overburdening household budgets.
“The current scheme is likely to impose a considerable cost to the Australian economy going forward,” the report concludes, noting the RET is abating carbon at an effective cost to the economy of $125 a tonne — or about five times more than the current carbon tax which the Coalition plans to repeal from July.
“While the RET is in place, investment is directed to less efficient and higher cost renewable technologies — at the expense of more efficient and lower cost generators.”
The report’s findings are likely to fuel discontent among the growing number of Coalition backbench MP’s, who are openly opposing Environment Minister Greg Hunt’s policy of supporting the RET.
The RET scheme was introduced by the Howard Government in 2001 and expanded by Labor in 2010 to make up about 5% or $70 a year in the typical household’s electricity bill. It was designed to ensure that 20 per cent of Australia’s electricity — 41 terawatt hours — comes from renewable sources by 2020.
However, due to falling demand for power, it is expected the target to equate to about 27% of total electricity generation.
Senior Dean Smith, Chairman of the Coalition backbench energy committee, said the great majority Liberals were pushing for significant changes in the RET.
Craig Laundy, Liberal member for Reid in Sydney’s west, said “the Liberal backbench is acutely aware of the impact of rising power bills as a result of the RET.”
“While we have to empathise with investors in the renewable sector, the impact on day to day power bills for ordinary families is not acceptable,” Mr Laundy said.
The Deloitte analysis anticipates an extra $10.3 billion in investment in renewable energy if policies remain unchanged, and electricity prices to remain well above where they would otherwise be until 2030.
“The upward pressure on retail prices flows on to affect the rest of the economy, raising the cost of many day-to-day functions that depend on electricity,” the study said.