Review of the Renewable Energy Target

The Federal Government has released the Terms of Reference for a review into the Renewable Energy Target (RET) scheme.

Renewable Energy Target Review – Terms of Reference

Background

The Renewable Energy Target (RET) scheme, comprised of the large-scale and small-scale schemes, is aimed at increasing renewable energy generation and reducing greenhouse gas emissions from the electricity sector. It is designed to deliver the equivalent of 20 per cent of Australia’s electricity from renewable sources by 2020.

Scope of the review

The review is to examine the operation and costs and benefits of the Renewable Energy (Electricity) Act 2000 (‘the Act’) and related legislation and regulations, and the RET scheme constituted by these instruments. This includes considering:

• the economic, environmental and social impacts of the RET scheme, in particular the impacts on electricity prices, energy markets, the renewable energy sector, the manufacturing sector and Australian households;
• the extent to which the formal objects of the Act are being met; and
• the interaction of the RET scheme with other Commonwealth and State/Territory policies and regulations, including the Commonwealth Government’s commitment to reduce business costs and cost of living pressures and cut red and green tape, and the Direct Action policies under development.

The review should provide advice on:

• whether the objective of the RET scheme, to deliver 41,000 gigawatt hours (GWh) and small scale solar generation by 2020, is still appropriate;
• the extent of the RET’s impact on electricity prices, and the range of options available to reduce any impact while managing sovereign risk;
• the operation of the small-scale and large-scale components of the RET and their interaction;
• implications of projected electricity demand for the 41,000 (GWh) target; and implementation arrangements for any proposed reforms to the RET, including how to manage transition issues, risks and any adjustment costs that may arise from policy changes to the RET.

The review is also to consider the Government’s election commitment to reinstate native forest wood waste as an eligible renewable energy source.

Process

The review is to be led by a panel of experts appointed by the Ministers for Industry and the Environment, supported by a secretariat in the Department of the Prime Minister and Cabinet. The panel is to undertake public consultations, seek submissions and provide a report to the Prime Minister, the Treasurer and the Ministers for Industry and the Environment by mid-2014.