Antinuclear

The renewable energy industry has reacted with outrage at suggestions from AGL Energy, the biggest utility, that renewable energy investment in Australia would remain frozen, even if the political deadlock over the renewable energy target was broken. AGL managing director Michael Fraser, who steps down this month, claimed on Wednesday that the RET was “broken”, and because wholesale prices were so low, and there was so much excess capacity, then large utilities would not sign contracts for new renewable energy projects.

Fraser said this would remain the case even if the current 41,000GWh target was lowered by mutual agreement between the Abbott government and the Labor Opposition. Talks on the RET have resumed in the past week, with indications that a compromise target of around 34,000GWh to 37,000GWh could be reached.

One executive noted that Fraser had been a strong supporter of the RET, and happy with its structure, when AGL was a large investor in renewables. However, AGL has since change the colour of its business, from green to brown and black, with its $2 billion purchase of Loy Yang A, the single biggest emitter in the country, and another $1.6 billion on the Bayswater and Liddell coal plants in NSW.

The suggestion that coal generators should be paid to close is particularly galling since AGL Energy, by its own admission, effectively paid nothing for Liddell, based on the assumption that it was likely to close in 2017, if its major customer Tomago aluminium smelter also closed.

But AGL is now signaling that Liddell could operate beyond the 2022 “technical” end of its life. And it has argued that unless retiring coal-fired generators got payments for “remediation”, then the excess capacity would remain in the market.

The renewable energy industry is at a virtual standstill. Australia has slipped to 31st in terms of investment in large-scale renewables, falling behind Honduras and Myanmar. Once the Bald Hills project and the Portland wind farm expansion in Victoria are complete, there will be no wind generation under construction under the RET.

The renewable energy industry is now suggesting that either the “penalty price” for retailers not meeting their renewable energy quotas be increased, or the country should adopt the UK system, where retailers that meet their target are paid monies by retailers that don’t.

“The intent of the shortfall price within the renewable energy legislation was to discourage liable parties from boycotting the scheme, thereby preventing achievement of the public policy objective,” said Infigen Energy spokesman Richard Farrell.

“The big three retailers have pursued a campaign to reduce Australia’s renewable energy target so as to reduce competition from new entrant renewable energy in their generation and retailing operations.

“Their claims otherwise are clearly disingenuous. The modelling conducted to support the Warburton review showed the RET can be achieved at certificate prices well below the shortfall price, while delivering lower electricity prices for consumers.

“It’s clear that AGL’s intention is to continue to boycott the scheme at the expense of their customers. It is not up to me how to tell AGL to run its business but I suspect its customers would vote with their feet if such a strategy was employed.”

The Clean Energy Council, which Fraser chaired until late 2013, during the company’s “green” days, says the arguments from the fossil fuel generators are bunkum. “The clean energy industry is confident that, if the current RET review is resolved swiftly, the 41,000 GWh by 2020 LRET can be met,” a spokeswoman said. “This is supported by the Warburton Review that showed the LRET could be delivered without the market going to penalty.

“While the Clean Energy Council acknowledges that there is a current surplus of generation in the market, it is clear that the problem is too much fossil fuel generation capacity – not too much renewable energy.”………..http://reneweconomy.com.au/2015/utilities-hold-renewables-ransom-coal-pay-outs-34217