Christopher Back (WA, Liberal Party) Share this | Hansard source

I wish to discuss the renewable energy target review and its report, now that it has actually been handed to the government by the independent panel, chaired by Mr Dick Warburton. I want to make some comments about the review itself. The first point I want to put to bed is around some allegations that have been bandied about in this place during the week to do with the apparent incompetence of the panellists to review the RET. I just want to point out that, in addition to Mr Warburton, the other panellists include the eminent Mr Brian Fisher AO PSM, a previous executive director of the Australian Bureau of Agricultural and Resource Economics and Sciences. He is a renowned economist. Another panellist is Ms Shirley Int't Veld. As a Western Australian, she was the managing director of Verve Energy in WA from 2007 to 2012. Verve was the energy instrumentality that used more renewable energy sources than any other in Western Australia, so I do not know how she could not be regarded as credible. The other panellist is Mr Matt Zema, managing director of the Australian Energy Market Operator. So I want to dispel the myth that this group was not competent to undertake the work.

For those who might be interested, I will review what the RET is all about. The RET is a government intervention designed to mandate the proportion of electricity generated from selected sources. It is designed to support a policy of at least 20 per cent of Australia's energy coming from renewable sources by 2020; as such, the policy taxes electricity users and, in some cases, non-renewable generators. How does it work? The renewable energy certificate market emerges from the energy targets. Renewable energy certificates, or RECs, are issued to power station generators classified as renewable under the act. They are a form of energy currency as electricity retailers must purchase the RECs to cover their liability. Costs are passed on to consumers through purchase of mandatory certificates by electricity retailers. That, of course, is where it becomes a tax on energy consumers.

The first point I make about the target is that the objectives of the act have not been met, principally because there has not been to any extent a reduction of greenhouse gases in the time the target has been in place. The second point is that whatever achievements the renewable energy sector has made have largely come from hydroelectricity. Hydroelectricity, as we all know, was around for a long time before the renewable energy target was formed. Having lived and worked in Tasmania and having even had to declare an interest because a company of which I was the managing director actually supplied lubricants and fuels to the hydroelectricity scheme in Tasmania, I place on record that it is a wonderful scheme.

Senator Singh interjecting—

I want to place on record that I, for one, want to make sure that—whatever outcome is eventually decided by government—the hydroelectricity scheme is enhanced, protected and encouraged independent of the RET system, because it preceded RETs by so many years, as Senator Singh herself indeed knows.

At the time it was suggested that to achieve a 20 per cent contribution of renewable energy by 2020 would require some 41 gigawatt hours to be generated by renewable sources. We know that two things have happened. First of all, there has been a drop in demand—