Prime Minister Tony Abbott made it clear that the interaction between the Renewable Energy Target (RET) and power prices would form the core of the 2014 review into the policy. But the final recommendations made to the Federal Government by the RET Review’s Expert Panel seem distinctly at odds with this intent.
This paper examines the impacts on retail power prices of the RET Review Panel's two main recommendations, which are:
- changing the RET to a so-called 'real' 20 per cent target
- closing the Large-scale Renewable Energy Target (LRET) to new entrants and shutting down the Small-scale Renewable Energy Scheme (SRES)
Additional Clean Energy Council analysis of modelling conducted for the RET Review by consultancy ACIL Allen shows that:
- Moving to a so-called 'real' 20 per cent target would see household power prices as much as $35 a year higher in 2020 compared to leaving the RET alone.
- Closing the LRET to new entrants and shutting down the SRES in 2015 would cause household power prices to be $56 a year higher in 2020 and $85 a year higher by 2030.
- Any scenario in which the RET is reduced would result in higher power prices for consumers.
These findings put the review panel's recommendations at odds with the core focus of the RET review. Based on the panel's own analysis, the current RET policy should be left alone for the benefit of consumers, investors and the renewable energy industry.