Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

My question is to the Minister for Climate Change and Water, Senator Wong. Minister, do you stand by your assurances to the Senate earlier this year that solar hot water and heat pumps would only account for five per cent of the renewable energy target and their inclusion posed no risk to the integrity of the scheme?

Penny Wong (SA, Australian Labor Party, Minister for Climate Change and Water) Share this | Link to 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.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. Minister, I asked whether you stood by your assurance that solar hot water and heat pumps would only account for five per cent of the RET. Is it not true that these energy efficiency technologies will take up roughly 50 per cent of the overall target and that in recent months they have created a large oversupply of RECs, resulting in the crash of the price for renewable energy certificates and putting hundreds of renewable energy jobs and millions of dollars in investment in jeopardy, and that this will not wait for COAG to produce a report?

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

I think Senator Milne is quoting Mr Diesendorf in terms of the figures she is quoting. My recollection, and I stand to be corrected, is that a range of figures were discussed. I pointed out that all of the propositions were based on various modelling assumptions. In fact, as I recall, Senator Milne, in that debate, as she is today, put a range of modelling outcomes. Some people agree with that, some people do not. Obviously, we are concerned as the government to ensure the effectiveness of the renewable energy target and we will continue to monitor the effectiveness of the target. It is a fourfold increase in Australia’s renewable energy. We think it is an important policy, which is why we were so keen to negotiate passage of this legislation through the Senate. We are very pleased that that has occurred. As I have said previously, there are a range of views as to why the renewable energy certificate price is at the place it is. Obviously, the government will continue to monitor it. (Time expired)

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. I remind the minister that on Wednesday, 19 August, at 6.06 pm, she said, ‘The modelling indicated five per cent.’ Minister, will you admit that the government has got it wrong and will you move immediately to amend the renewable energy target legislation by adding renewable energy certificates from solar hot water, heat pumps and the solar PV multiplier to the top of the target, as you were prepared to do for non-renewable fossil fuel coal seam methane? Will you admit that that is precisely what the Greens were trying to do by amendment at that time and that you rejected it?

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

I am interested in Senator Milne’s last supplementary in that Senator Milne acknowledged that what I referred to was the modelling. It is unfortunate that in her first question she was not actually clear about the fact that my indication to the Senate was based on the modelling. I appreciate that clarification in the last supplementary. The negotiations on the renewable energy target have been traversed previously. It is the case that the government accepted some amendments and did not accept others, and made a judgment about what it considered to be the case. If Senator Milne wants to argue again why we should or should not have accepted some amendments, that is obviously a matter for her. This legislation was passed through the Senate with the Greens and opposition support. The government acknowledges that.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

Mr President, I rise on a point of order going to relevance. Senator Milne asked the minister what her action will be to remedy the situation, and she should answer that question.

John Hogg (President) Share this | Link to this | Hansard source

Senator Bob Brown, as I have said, I cannot instruct the minister. I believe the minister is being relevant to the question. Minister, you have 13 seconds remaining.

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

Again, a range of views have been put to the government as well as publicly stated about the current REC price. It may be the issues raised by Senator Milne; it may also be, for example, the uncertainty around the CPRS. (Time expired)