The long-running saga of Australia’s renewable energy target has entered another round with Labor declaring there will be no deal if the government continues to review the scheme.
An eleventh hour government decision to retain two-yearly reviews has derailed a new bipartisan agreement that would have reduced the target from 41,000 gigawatt hours of renewable energy production by 2020 to 33,000.
The move, believed to have been put forward by Industry Minister Ian Macfarlane, has prompted a furious reaction from the clean energy industry, which has demanded that the government stand by its promise to scrap two-yearly reviews.
The Clean Energy Council and a raft of energy companies have urged the government to scrap the reviews, while the Australian Chamber of Commerce has said there should be no further inquiries into the scheme until 2020.
The Labor caucus agreed early on Tuesday that a figure of 33,000 could form the basis of an agreement with the government but the opposition could not support a plan that included two-yearly reviews.
“The government shouldn’t proceed with introducing legislation if the package they put to the parliament has the two-year reviews in it,” Labor’s environment spokesman Mark Butler said on Tuesday.
“The industry has made it clear that new building will not proceed if there is still a two-year review process that would lead to the review starting in as little as seven months’ time.”
Mr Butler said the industry had been blindsided by the push to reinstate reviews after the government vowed to end inquiries into the scheme as a gesture to restore certainty.
“Why this question was put back on the table on Friday, I don’t know,” he said.
“It is clear from statements from the industry, the solar council and the Clean Energy Council that this deal means nothing if there are still two-yearly reviews.”
The industry dislikes regular reviews because the prospect of further changes to the target undermines its ability to attract investment for new wind and solar farms.
Managing director of Infigen Energy, Miles George, said the decision was “anti-business, a show of support for red tape” and did “nothing but undermine investor confidence”.
The executive manager of external affairs at Pacific Hydro, Andrew Richards, said the government had made it clear a review last year by businessman Dick Warburton would be the last.
“This was their promise to industry, a promise now broken,” Mr Richards said.
Government sources said the push to retain regular reviews was driven by Mr Macfarlane, who did not raise the matter until late last Thursday.
He had not previously discussed keeping the reviews with Environment Minister Greg Hunt, and both ministers had promised in several media conferences the reviews would stop.
The matter was discussed in cabinet last Thursday evening as part of a broader proposal to agree with Labor to a target of 33,000 gigawatt-hours.
A spokeswoman for Mr Macfarlane said the 33,000 gigawatt-hour compromise would mean the amount of renewable energy production would have to grow significantly.
“This will be a challenge for the renewable energy industry,” she said.
“For this reason the government has also proposed a continuation of the biennial reviews … to ensure households are not being hit with higher electricity prices if the industry doesn’t meet the target.”
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