Penny Wong (SA, Australian Labor Party, Minister for Climate Change and Water) Share this | Hansard source

Thank you to Senator Milne for her question and her ongoing interest in the renewable energy target. As I recall, there was quite a lengthy discussion in the debate on the renewable energy legislation, which, ultimately, I think, all parties in the chamber supported—I cannot actually recall if Senator Fielding did, but certainly the opposition and the Greens did—about the likely effect of various aspects of the target, including the issue that Senator Milne raises. It is obviously the case that the price of renewable energy certificates is set by the market and depends on the supply as well as the demand for renewable energy. The demand, of course, is created through the renewable energy target’s annual targets. The REC prices that are most often quoted publicly are obviously the spot market. I think it is important in this debate to recognise that many, if not most, renewable energy projects enter into long-term contracts for the sale of renewable energy certificates and therefore are not subject to or not as open to the short-term fluctuations on the spot market.

It is the case that there have been some recent price falls in relation to the renewable energy certificate price. It is the case also that the government are going to monitor that closely. We went to the election with a very clear commitment to increase the renewable energy target, which we have managed to progress through this chamber with the support of other parties. We will continue to monitor its effectiveness. It is the case that there have been a range of theories put forward about the reason for the fall in the REC price.