Changes to Renewable Energy Target scheme to push forward big projects
26 February 2010
Changes to the Renewable Energy Target (RET) scheme announced today by the Federal Government will help push forward projects to develop wind, solar and geothermal energy that have been in limbo.
The Federal Government announced that the RET scheme will have two parts from 1 January 2011 – the Small-scale RET scheme and the Large-scale Renewable Energy Target.
The Large-scale Renewable Energy Target will cover large-scale renewable energy projects involving wind farms, commercial solar and geothermal, while the Small-scale RET will cover technologies such as solar panels and solar hot water systems.
Allens Arthur Robinson Partner Anna Collyer said that today's announced changes will provide incentives for large-scale projects to move forward.
'Under the scheme as currently structured, the incentives provided for small renewables were resulting in Renewable Energy Certificates (RECs) flooding the market and depressing the REC price,' Ms Collyer said.
'This was having a deterrent effect on proponents pursuing large renewable projects.
'By separating the schemes and fixing a price for small renewables, the Federal Government is allowing the market to set a REC price for large-scale renewables that will provide incentives for those projects, as originally intended by the scheme.'
Ms Collyer said the market price for RECs effectively provides a subsidy for large renewable projects, which is necessary to make those projects economically viable under the current electricity market structure.
A higher market price will result in a greater contribution to the economics of these projects, she said.
The RET scheme guarantees that 20 per cent of Australia's energy by 2020 will come from renewable energies.
Ends
For further information, please contact:
- Anna CollyerPartner,
Melbourne
Ph: +61 3 9613 8650
Anna.Collyer@aar.com.au - Jason SilveriiCorporate Communications Manager,
Melbourne
Ph: +61 3 9613 8014
Jason.Silverii@aar.com.au
Notes for editors.
Allens Arthur Robinson has staff in 14 cities and eight countries across the Asia Pacific.
