Do we need the Renewable Energy Target?
The Renewable Energy Target (RET) is up for review and many experts believe the goal of having 20 per cent of Australia's power derived from green sources by 2020 will be scrapped.
The review is being undertaken by an expert panel and will work out whether the target is working efficiently.
"Australia's diversity of energy sources is one of our greatest national strengths. Renewable energy has contributed to the energy mix, but we must ensure that the program is operating effectively," Minister for Industry Ian Macfarlane said in a press release announcing the review.
The aims of the target are to reduce emissions and lower electricity prices for households without costing the manufacturing sector or reducing the amount of investment in the country.
Headed by Dick Warburton, a climate change denier, the review is due to be presented to Prime Minister Tony Abbott in the middle of the year.
Is renewable energy to blame for rising electricity prices?
Some believe the target is costing households and say it has contributed to the rise in electricity prices. Is this really the case?
A Bloomberg white paper modelled the changes that will occur if the RET stays the same, is scrapped and what will happen if the target is reduced or deferred to 2025.
It found that if the RET is axed entirely, power prices will rise by around 2 per cent by 2020. The Clean Energy Council (CEC) said this is around $50 per year for the average household in 2020 and beyond this date bills could increase by around $140.
The Clean Energy Council (CEC) say gas prices are driving up the cost of energy in Australia, not renewables.
"Fewer renewables mean more gas, which is set to triple in price this decade," it said.
Another factor behind the increase in energy prices, it says, is the cost of poles and wires that transport electricity around. These are said to be behind 45 per cent of power bills. CEC policy director Russell Marsh says this has been the biggest driver of cost increases in the past five years.
How does the RET affect electricity prices?
Although there is a cost involved in the creation of renewable energy projects such as wind farms, solar systems and hydroelectricity, this is offset by a reduction in the wholesale price offered to electricity suppliers.
Bloomberg calculates it will cost Australian end-consumers half a billion dollars per year from 2015-2020 to keep the RET but that they will save $2 billion as a result of lower wholesale prices.
This means, overall Australians would be $1.5 billion better off if the RET is kept.
If it is scrapped, Australians will pay 22 per cent more as there won't be savings in wholesale prices but legacy investments will continue to be compensated.
Greenpeace Australia suggests the price of renewable energy will continue to become cheaper, particularly if the subsidies to the coal and gas power industries are reduced.
How will the RET and a strong renewables sector drive investment?
If the RET is scrapped, Australia will lose out on investments. Bloomberg's model forecasts investment will drop by 59 per cent in the renewable energy market. Not only that, but 63 per cent less capacity will be installed than if the RET is retained.
Keeping the RET as it is now will drive a further $35 billion worth of investment into the country, Bloomberg suggests. This will create a 14.2 giga watts of renewable capacity by 2020.
Investment will drop by 34 per cent if the RET is reduced from 45 terra watt hours (TWh) to 27TW, and if the target is deferred it will only drop by 4 per cent.
How many jobs will be created by the RET?
Less investment in Australia if the RET is scrapped means that 6,600 clean energy jobs will be lost, according to Bloomberg.
Conversely, keeping the status quo will result in the creation of a further 18,400 jobs, according to the CEC. This will occur with no ongoing fuel costs.
The majority - 9,700 - of these jobs will be in the large-scale renewables sector, to create wind and bioenergy systems. The remaining 8,700 jobs will be in the household renewable energy arena, in solar power and solar hot water.
What role does the RET have in reducing Australia's carbon footprint?
Keeping the RET will mean Australia can reduce its greenhouse emissions by 5 per cent in 2020 when compared to the 2013 levels, according to Bloomberg.
Scrapping the RET on the other hand would create around 34.7 million tonnes of carbon emitted into the atmosphere, say the CEC.
The impact of renewables on the environment is clear, with South Australia's electricity sector emissions reduced by 27 per cent in the 2011-12 financial year by its wind farms alone, CEC claim.
Most renewable energy sources pay off their carbon footprint quickly, say Greenpeace Australia, and items like solar panels are able to do this within four years, on average.
The environmental impact does not just end there. If all fossil fuel generating systems were replaced with wind turbines, it would save around 70 million birds every year, Greenpeace say.
Not only that but the land used for these projects can still be still be used to support farming and cattle grazing.
Posted by Liam Tunney.