Six months ago, it appeared it could be time to declare the war on renewable energy over.
With a change of leader and a freshly re-elected Government, the renewable energy industry gathered for the 2016 Clean Energy Summit last July to hear from new Energy Minister Josh Frydenberg as he shared his vision for the sector for the first time.
Minister Frydenberg had been in charge of the portfolio for about a week, but he communicated and understanding and an acceptance that clean energy has an essential role to play in Australia’s energy transition.
In following months, the Government backed down from policies to repeal both ARENA and the CEFC, and the sector took a moment to breathe a sigh of relief.
Three years of hostilities appeared to be over.
Bloomberg New Energy Finance reported earlier this month that Australian investment had recovered by almost 50 per cent. In 2016, Australian investment in clean energy recovered to $3.44 billion, up from $2.3 billion in the year prior.
While an apparent return to sensible policy discussion at a Federal level would have helped this recovery, it has been State based policies that have underpinned the new investments. Of note, the ACT’s 100 per cent renewable energy target supported three wind farms and three large-scale solar farms commissioned during 2016.
Seemingly realising that investment in clean energy has begun to power ahead with the support of policies beyond the control of the Federal Government, Coalition MPs have started manoeuvring to reopen the debate around renewable energy targets and climate policies.
Coalition MPs will be mindful that 2017 will be a year of more climate and energy policy reviews.
Deputy Prime Minister, Barnaby Joyce, did not give unequivocal support for the Federal renewable energy target when speaking to ABC Radio this morning, singling out the South Australian Government for criticism for introducing a more ambitious renewable energy target of its own.
“We have an issue with states who go it alone, on targets that are well beyond the capacity that become apparent for even them to provide and South Australia is a classic example of that” Mr Joyce told ABC’s AM.
“When you have states like South Australia that go off onto the romantic benches of excessive renewables targets, the consequences are there to see when they can’t keep the lights on”
Joyce’s comments follow similar sentiment from Energy Minister Frydenberg. Writing in The Australian last week, Minister Frydenberg also took aim at the States, singling out those currently led by Labor Governments and laying blame for market instability.
“If Labor states really wanted to show their constituents they cared about the rising cost of living and the fact that electricity prices have increased faster in Australia than any other OECD country in the years since 2007, then they would immediately abandon their unrealistically high renewable energy targets.” Minister Frydenberg wrote.
The comments accompanied by a chorus of backbenchers including former Prime Minister Tony Abbott calling for the outright repeal of the Renewable Energy Target, pre-empt the reviews to be conducted during 2017.
Labor shadow Minister for Climate Change and Energy Mark Butler highlighted the need for coordinated policies to provide certainty and stability in the market.
“Every credible stakeholder has made the case that the most costly policy available is to persist with the current vacuum. This prolongs investment uncertainty, risking security and pushing prices up.” Mr Butler said in a statement.
One of the reviews is already underway, with COAG instigating a review of the National Electricity Market, led by Chief Scientist Dr Alan Finkel. The terms of reference for this review include analysis “into the impact of carbon mitigation policies at both the Federal and State level on energy markets”.
The second review will commence in February, to be finalised before the end of the year, and will examine Australia’s broader climate change policies. The review will be driven from within the Department of the Environment and will focus on policies to meet Australia’s emission reduction commitments under the Paris Agreement.
While there seems to be a coordinated campaign to pressure Labor Governments to back down from more ambitious clean energy policies, the emergence of disparate climate policies between Federal and State governments isn’t new.
Up until 2009, Victorian Government had its own certificate based Victorian Renewable Energy Target. That scheme was effectively merged into the Federal target when the Rudd Government legislated a 20 per cent by 2020 Federal renewables target.
In response to the more recent impasse around renewable energy policies at a Federal level, several states have announced their own schemes. Queensland, Victoria, South Australia and the ACT have all introduced their own targets.
Talk of winding back the Federal Renewable Energy Target is likely to lead to further fragmentation as states work to seize the economic and environmental opportunities that exist in an emerging clean energy sector.
Realignment of clean energy policy across Australia will require negotiation and recognition at a Federal level that there is a clear appetite for more ambitious clean energy targets that the States have been responding to.
But until this is recognised by the current Federal Government, the industry, advocates and activists can only prepare itself for yet another round of struggle and debate.