The Abbott government will seek to scale back the renewable energy target to reflect falling electricity use, despite green groups warning it will cost jobs in the south-west.
After months of speculation Industry Minister Ian Macfarlane yesterday confirmed the government will try to scale down the 2020 target from 41,000 gigawatt hours to a target in the 26,000 gigawatt hour range.
The RET has been a key driver for the south-west’s wind farms but the government argues the present 41,000 gigawatt target will equal 27 per cent when 2020 rolls around.
“We will maintain the RET at 20 per cent – real,” Mr Macfarlane told reporters at Canberra’s National Press Club yesterday.
“I haven’t got the exact number but if it is reduced to 20 per cent real you could say reasonably confidently that the target will be in the 26,000 range.
“We will exempt from the target all energy intensive trade-exposed industries … and that includes of course aluminium.”
The long-awaited statement comes after a review of the RET by businessman and self-described climate sceptic Dick Warburton called for it to be abolished. But the government still needs to negotiate with Labor to pass the changes, which is unlikely to happen in the last two weeks of Parliament.
“We simply won’t get the legislation through this year. The reality is we are looking at a 2015 start,” Mr Macfarlane said.
Australian Wind Alliance co-ordinator Andrew Bray said the “real” target would be the death knell for the industry.
“Regional areas like south- west Victoria would be the big losers if the government gets away with this, with hundreds of jobs and millions of dollars worth of investment sacrificed to please zealots within the party,” Mr Bray said.
“The government seems to have learnt nothing from the failure of the Warburton review.”
More than a year of uncertainty around the RET review has crippled the renewable energy industry, with the Clean Energy Council yesterday stating up to 70 per cent of investment had dropped off.
Wind farm projects in the south-west in places such as Mortlake south, Penshurst and Hawkesdale have ground to a halt.
Up to 150 workers at Portland wind tower maker Keppel Prince are also watching nervously as orders for new towers dry up.
The government and Labor have already agreed to offer exemptions to smelters, including Portland Aluminium, which face higher electricity costs under the RET.