Modelling shows scrapping RET means more bill pain  

Bloomberg New Energy Finance has conducted modelling for some possible scenarios regarding the future of the renewable energy target. Currently under review, it’s widely believed that the Abbott government plans to scrap the scheme altogether or possibly reduce the target drastically.

A BNEF press release tells a sorry story for consumers should the RET be scrapped. Between $12 and $21bn of renewable investment will grind to a halt, wind and solar industries will lose between 7,000 and 11,000 jobs every year and power companies will increase profits on the back of increased customer rates.

“Cutting or reducing the Renewable Energy Target is likely to result in less competition among fossil-fuel power generators and strong future increases in the price of electricity,”, said Kobad Bhavnagri, Bloomberg New Energy Finance’s head of Australia. “This helps to explain why many of Australia’s largest power companies are now pushing for a reduction in the target,” he said.


1. If the RET is abolished altogether

BNEF project that the cost to consumers will be 22% higher with no savings on the wholesale price of electricity, while utilities pass on the cost of maintaining legacy assets to their customers.

2. If the target is reduced to 21,000 MWh

Should the RET be reduced from 41,000 MWh to 21,000MWh emissions from the power sector will be 3% higher by 2020 and the renewable industry will suffer reduced growth with 6,600 fewer jobs created each year.

3. Current target differed to 2025

Pushing back the target by another five years will see 10% less solar capacity installed by 2020. Consumers will enjoy a 15% reduction on the price of electricity as the substantial contribution to renewables allows the mechanism to operate more efficiently.

4. Combining SRES and LRET

Merging the two schemes will hurt large-scale installations due to the unpredictable nature of the smale-scale renewable industry. Investment, capacity and jobs will be lower by 2020 than if the schemes continue to operate autonomously.


The full white paper from the BNEF can be found here.