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Govt, Labor in talks on renewable energy

Federal Labor and the government have begun talks on shoring up the renewable energy sector, initially agreeing to protect the small-scale solar industry and industries such as aluminium.

But the two parties differ on what the renewable energy target should look like.

The RET is a bipartisan target which requires 20 per cent of Australia’s energy use to be sourced from renewable energy by 2020.

The legislation, agreed by Labor and the coalition, specifies the 20 per cent target as 41,000 gigawatt hours.

But following a review by businessman Dick Warburton, the government says changes in Australia’s energy use mean the 41,000 gigawatt-hour figure is likely to represent much more than 20 per cent by the end of the decade.

This will push up the cost of energy and hurt businesses and consumers.

Industry Minister Ian Macfarlane and Environment Minister Greg Hunt on Wednesday began formal talks with Labor on a “common sense solution”.

Mr Macfarlane said the basis of the talks was keeping the RET at a “real 20 per cent” – which puts the actual target at an estimated figure of between 26,000 and 28,000GWh.

The government also agreed to retain existing support for household solar systems and, in a bid to protect blue-collar jobs, would exempt from the RET all energy-intensive trade-exposed industries as currently defined in the legislation.

These include aluminium production, copper smelting, zinc processing and cement-making.

Two-yearly reviews of the RET would cease.

Shadow treasurer Chris Bowen said Labor wanted the bipartisan RET to remain at 41,000GWh, but said the opposition would work “constructively” with the government.

“It’s important the RET can remain in place and can continue to encourage investment in renewable energy for the good of the economy and the environment,” Mr Bowen said.

He accepted some industries such as aluminium needed special attention and welcomed the commitment to the solar industry.

Opposition climate spokesman Mark Butler warned that only a deal with Labor, as the alternative government, could secure the future of renewable energy as no business would want to invest in the sector based on a short-term deal with crossbenchers in the Senate.

Mr Macfarlane admitted the headline figure of 41,000GWh would be reduced under the government’s proposal.

However, he said if energy consumption continued to rise, the government would try to ensure that half of the growth over the 20 per cent target would “go into the renewable energy sector”.

Time had run out for legislation to pass this year but a 2015 start date for changes was realistic, he said.

Greens leader Christine Milne, who’s seeking talks with Prime Minister Tony Abbott on climate policy, said weakening the RET would decimate the solar and wind industries and the jobs that they created as well as drive up power prices.

“The Labor party must stand firm and reject this deal outright,” she said.