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

Firstly, as we have certainly seen in the RSPT debate and the CPRS debate there are always arguments about modelling. There are always a range of assumptions involved in modelling. My recollection, and I could be wrong, is that the price that was assumed in the previous modelling of solar PV was actually higher than it has trended down to. That is not a bad thing, in the sense that making solar panels more cheaply indicates that that market is becoming more mature and the capacity for unit cost to reduce is increasing.

In these amendments we have sought, after quite a lot of discussion, to try and strike a reasonable balance between the different policy objectives which are of importance here. One of those is electricity cost. Another is a proper assessment of a reasonable allocation of risk in terms of different aspects of the modelling altering—who should properly bear the risk of that and to what extent?

The third thing you have to balance, obviously, is the issue of certainty. The government is absolutely committed to providing industry with as much certainty as is possible and reasonable, given that the whole purpose of this legislation is to drive investment in renewables, both large and small. In relation to the business certainty issue, which arises in the context of banked renewable energy certificates, we have held lengthy discussions with industry and with members of the clean energy sector about what a reasonable level of certainty would be in order to facilitate the investments that I think all of us want. In discussions with various stakeholders, the figure of 20 million has been indicated as reasonable to enable various decisions to be made with a degree of certainty whilst ensuring a reasonable balance of risk is borne by both industry and electricity users under the scheme.

We think that the 20 million target is reasonable, given discussions with the stakeholders. It is the case that our modelling suggests 16.2 million by the end of the year. Under this amendment, even if that level of 20 million is not correct, industry knows the way in which government will deal with those additional renewable energy certificates. We understand that if there are a far greater number of renewable energy certificates banked at the conclusion of this year then that may have an impact on investment decisions which we believe are in the national interest. So we think this is a balanced position. It is a position that reflects a substantial amount of consultation with industry. It provides a level of certainty that is appropriate and, for that reason, the government will not be supporting the Greens amendment. I will be moving the government’s amendment, which has already been foreshadowed and circulated, in relation to dealing with this banked RECs issue.