Mark Butler, Renewable Energy Target

TRANSCRIPT OF INTERVIEW WITH ABC CAPITAL HILL

Date:  29 August 2014

HOST: Welcome to Capital Hill. The RET review has found that renewable energy is providing more energy than the target, more than the 20%. Isn't that a case for scaling it back?

MARK BUTLER, SHADOW MINISTER FOR ENVIRONMENT, CLIMATE CHANGE AND WATER: Let's get rid of that myth first of all. The legislation doesn't talk about 20 per cent. The policy was that at least 20 per cent of electricity would be sourced from renewables by 2020. The legislation talks about a particular generation target, 41,000 gigawatt hours by 2020. And that is the election commitment that Tony Abbott made only about a week or 10 days before the election.

HOST: What would be the impact if the Renewable Energy Target was scaled back in the ways suggested by the review?

BUTLER: Well, we've had four reports over the last few months, including the modelling done for the Government's own review, that indicate that household power prices will be higher without the Renewable Energy Target than they will be with the Renewable Energy Target. That's because the additional wind power and solar power in the system now is starting to drive down wholesale power prices. That's going to be particularly important when gas prices start to increase significantly over coming years. So what it would mean is higher power prices for households, but also it will mean thousands of jobs that have been created over the last several years, clean energy jobs will go. Investors from around the world will no longer visit Australia and make decisions to invest the billions of dollars that were otherwise was in the pipeline over the next several years. And the electricity sector will continue to start generating more pollution, not less pollution, which is what we've seen. All in all, it doesn't tick any box and it's beyond my imagination why the government is thinking of doing this.

HOST: It is the case, though, isn't it, that renewables are subsidised at the moment. Will there be a time when that subsidy is no longer necessary or is that time in fact still years and years off?

BUTLER: Well, this is an upfront subsidy and the report focuses significantly on that. It talks about the 4 per cent or thereabouts of the average household power bill that goes on the renewable energy certificates. What it doesn't talk about so much is the offsetting impact that this renewables capacity is having. As I said, extra wind, extra solar power in the system is depressing the wholesale price of electricity. So against the 4 per cent you've got to weigh the net downward impact. And what report after report has shown over the last several months is the beneficial impact, if anything, that it’s having on the price of electricity for households, such that if Tony Abbott gets rid of the Renewable Energy Target, household power prices will be higher, not lower than they otherwise would be.

HOST: Is the Renewable Energy Target for small-scale energy like for solar rooftops the only reason that people are putting solar panels on their roofs or do you think people would continue to do that even without the subsidy that's involved in that now?

BUTLER: Well, I think some people would probably continue to do it, but even this review suggests that getting rid of the support for small-scale solar would reduce that market by at least 30 per cent. The figures I have seen are more like 50 per cent but either way you're talking about thousands and thousands of jobs, and hundreds of thousands of households not having the opportunity to put solar panels on their roofs and get out of the spiraling rising cost of electricity; and also, we know that the additional solar capacity on rooftops is one of the very significant reasons why wholesale power prices are staying down, particularly at the peak times of the year when heatwaves hit south eastern Australia, for example, and traditionally wholesale power prices have spiked very, very high.

HOST: Any change would have to get through the Parliament, wouldn’t it, and could be stopped in the Senate?

BUTLER: That's right, but the beauty of this policy area over the last 12 years is that it's been underpinned by bipartisan certainty. Going back to John Howard's Renewable Energy Target, we’ve had four elections since then, since 2001, where the Labor Party and the Liberal Party, the two alternative parties of government, have completely agreed on Renewable Energy Target policy, including as I said shortly before the last election. We agreed on the precise generation target. And that is why billions of dollars in investment have flowed to Australia, creating thousands of jobs. In the middle of last year, Australia was rated as one of the four most attractive places to invest in renewables, along with the powerhouses of Germany, the US and China. Now, since this government came to office, and started to create uncertainty about what had been a very certain policy area, our position on that table has plummeted. Billions of dollars of investment that was due to come to Australia has simply frozen. This will cost jobs. It's going to lead to increases in our pollution levels and it's going to lead to higher power prices for households.

HOST: Mark Butler, thank you very much for your time

BULTER: Thanks Lyndal.