Antinuclear

The high economic cost of reducing Renewable Energy Target

Renewable Energy Target cut would hit budget: modelling, The Conversation, 18 Aug 14 Michelle Grattan Professorial Fellow at University of Canberra  Reducing the renewable energy target would cost the federal budget about $680 million more to meet Australia’s target of 5% emissions reduction by 2020, according to modelling released today by climate and conservation groups.

The modelling found that cutting the RET would increase the profits of coal power stations while boosting the costs for the public through more pollution without reducing electricity prices for consumers.

It would see “the loss of billions of dollars of investment in the short term”; by further destabilising the policy environment for investors, it would drive up the costs of power sector investment in the future.

“Outright abolition of the RET would further increase pollution and undermine clean energy investment.”

The government has an inquiry underway into the RET. But Clive Palmer has said his senators will oppose any change in the term of this Parliament.

The modelling was done by Jacobs SKM and commissioned by the Climate Institute, the Australian Conservation Foundation and WWF Australia……..

….The modelling found electricity prices would not be reduced and could rise slightly if the RET were reduced – by 15% wholesale and 2.5 % retail on average in the period to 2030. “This is consistent with modelling commissioned by the government and studies conducted independently,” the report said.

“For a household consuming 6.5 MWh of electricity annually (NSW average), reducing the RET would add about $35 to the annual power bill, with most of this increase taking place after 2020. Abolition of the RET would add about $80 a year.”

Reducing the RET would diminish investment in renewable energy in Australia out to 2040 by $8 billion in present value terms. Scrapping it would increase the loss to $10.6 billion, the modelling found.

Reducing the target would mean 150 million extra tonnes of carbon pollution by 2030, and 240 million tonnes by 2040. “Higher levels of pollution lead to socialised costs we estimate conservatively to be $14 billion.” http://theconversation.com/renewable-energy-target-cut-would-hit-budget-modelling-30598

August 18, 2014 - Posted by Christina Macpherson | AUSTRALIA - NATIONAL, business