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Australia’s Renewable Energy Target – Judgements on Policy Development Processes

This research analyzes the policy development processes of Australia's Renewable Energy Target (RET) through the review of stakeholder submissions. Key issues include the target value, appropriateness of review processes, solar credits multiplier, and maintenance of the status quo.

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Australia’s Renewable Energy Target – Judgements on Policy Development Processes

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  1. Australia’s Renewable Energy Target –Judgements on PolicyDevelopment Processes Genevieve simpson, phd candidate

  2. Outline Victor Habbick, FreeDigitalPhotos.net Outline Renewable Energy Target Review processes Analysis of Review submissions Issue 1: RET Target Value Issue 2: Appropriateness of Review processes Issue 3: Solar Credits Multiplier Issue 4: Maintenance of status quo Conclusion

  3. Renewable Energy Target Annual Renewable Generation BREE, 2012 Australian Energy Statistics, Canberra, 2012 Climate Change Authority, Renewable Energy Target Review - Final Report, Canberra, 2012 Mandates a percentage of annual electricity generation from ‘clean’ sources Supports small and large-scale generation Initiated 2001– 9,500 GWh Expanded 2009 – 45,000 GWh Separated 2011 – 41,000 LGC, 4,000 STC Incr. renewable capacity from 10,650 to 19,700 MW

  4. Legislated Review of RET • ‘Tambling Review’ in 2003: • Recommended increasing RET Target Value • Noted harmful effects of concurrent/repetitive review processes • On-going commitment to status quo ‘Potentially the most comprehensive overview of the status of Australia’s renewable energy industry’ (Kent& Mercer, 2006, Australia's Mandatory Renewable Energy Target (MRET): An Assessment, Energy Policy, 34, 1046-1062) • ‘Climate Change Authority Review’ in 2012: • Same issues? • New issues?

  5. Review Stakeholder Submissions • 8,660 submissions • 160 unique, 2 campaigns • Stakeholder details recorded • Issues of interest: • Support or reject value of RET • Review of Target value • Effects of continual review processes • Uncertainty in legislation • Perceptions of embedded policies, e.g. Solar Credits • Limitations?

  6. Issue 1: RET Target – Fixed or Variable Percentage? • 17% requested increase • 14% requested reduction to new demand • 63% requested no change • 6% requested abolishment • (N=132) • ‘Policy certainty required!’ • Why was it reviewed? • RET Target Value can be: • Fixed GWh, flex % • Fixed %, flex GWh

  7. Issue 2: To Review or not to Review? Review required in legislation Length of time between reviews optimal? 77% respondents – more than 2 years between reviews 9% respondents – no change to legislation 60% respondents – future reviews should maintain policy certainty (N=70) ‘Review fatigue’ - 10 reviews related to RET in 5 years Interaction with Carbon Price still unclear ‘Constant review is not reform’

  8. Issue 3: Solar Credits Multiplier for small-scale solar • Replaced Commonwealth rebate • Initiated 2009 – 5 x multiplier, reduced yearly • Scheme oversubscribed • Multiplier reduced ahead of time • 18% respondents noted scheme resulted in substantial investment (N=68) • 87% noted negative impacts / would not support use of multiplier • Issues include: • Phantom Certificates • Boom-bust cycles • Certificate overhang

  9. Issue 3: Solar Credits Multiplier for small-scale solar Phantom Certificates Multiplier creates certificates with no renewable potential 26% noted concern with phantom certificates ‘Target should be increased to account for phantom certificates’

  10. Issue 3: Solar Credits Multiplier for small-scale solar Boom-bust cycles Rushed purchasing behaviour to take advantage of high rebates 13% experienced boom-bust cycle Reduced installation quality Bankrupted businesses

  11. Issue 3: Solar Credits Multiplier for small-scale solar Certificate overhang Increased small-scale adoption = reduced demand = reduced price for certificates = mass purchasing by retailers 26% noted overhang ‘Certificate overhang expected until 2016’

  12. Issue 4: On-going commitment to status quo • 34 recommendations by Climate Change Authority • 11 proposed changes • Only 6 accepted: • 3 administrative • 1 to be enacted 2017 • 1 helpful to industry • Years between reviews doubled

  13. Conclusions: Victor Habbick, FreeDigitalPhotos.net • Stakeholders were most concerned with maintaining policy stability • Maintain Target value • Reduce the number of review processes • Solar Credits Multiplier: • Increased adoption • Had negative outcomes for small and large-scale industry, environment • Government chooses to maintain status quo • Scheme would be improved by: • Maintaining policy consistency for industry certainty • Only consulting where there is an intention to change • Removing embedded schemes

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