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The RET and greedy grid owners

By Luke Beattie - posted Tuesday, 24 December 2013

We need a rethink on the motivating factors of renewable energy. On one side of the coin it's the reduction of pollution produced by burning fossil fuels. On the other there's a real and quantifiable cost reduction for businesses that are impacted most by rising energy costs.

During a joint press conference on 18/12/13, both the Prime Minister and Minister for Industry, Ian Macfarlane, cited the cost of energy as a barrier to a thriving manufacturing industry. It appears that the coalition is posturing to either significantly reduce the Howard government's Renewable Energy Target, or to scrap it altogether. All while trying to, as the Prime Minister stated, "ensure that the workers of this country transition from good jobs to better jobs, from the industries of the past to the industries of the future."

To my knowledge, fossil fuel based industries have been around for a long time. Surely renewable energy could be classified as one of the "industries of the future"? Australia is not positioned to become a manufacturer of renewable components, but we certainly have the capacity to develop new and more efficient technologies.


This was recognised by the Labour Government when they formed the Australian Renewable Energy Agency in 2011. As stated on their website: "The Australian Renewable Energy Agency (ARENA) was established by the Australian Government to make renewable energy solutions more affordable and increase the amount of renewable energy used in Australia. We have a $2.5 billion budget to fund renewable energy projects, support research and development activities, and support activities to capture and share knowledge."

The uptake of solar systems on Australian homes has grown exponentially in the last 10 years. This is partly due to Government incentives and feed-in-tariffs (FiTs). Another major factor has been the decrease in price for solar components. The FiTs have now been removed for most of the population and those who install solar systems can expect to receive payment at approximately one-third of the rate that they pay for electricity.

During the FiT days, the industry had people lining up to become solar installers. The compliance of systems wasn't monitored as stringently as it is now and there were plenty of cowboys chasing a quick dollar (possibly the ones that had moved on from the Pink Batts scheme and the "Building Education Revolution" cash cows). As the easy dollar disappeared, so did they.

What's emerged is a resilient and viable industry that isn't reliant on Government incentives. A general population that can, for the most part, afford to buy a basic solar system to reduce cost of living pressures. But it doesn't end there.

Many companies, including those in the manufacturing industry, have installed privately-funded solar systems in order to reduce their energy and also to hedge a portion of the cost of energy over the long term. These commercial solar systems do not place excessive pressure on the grid infrastructure. Many are non-exporting and are just used to manage their base load.

Regardless of the Prime Minister's personal views on the science of climate change, it makes economic sense to encourage high energy consumers in the manufacturing industry to look at integrating renewable energy into their supply. Even China has recognised the value of renewables in industry and is well on track to achieving their goal of 15% renewable energy production by 2020. Maybe we can learn a thing or two from their commitment?


There's no doubt that high energy costs are a burden on our struggling manufacturing industry. However, this seems overstated in light of the higher cost of wages in our country and what has been a comparatively higher exchange rate. In an ever-competitive global market some of our most iconic Aussie products will no longer be viable to manufacture here. Look no further than Ford and Holden. It should not be the taxpayers' responsibility to fund incompetent management or noncompetitive industries.

As stated by the Industry Minister Macfarlane, "in terms of the cost of energy, the fact that a coal-fired power station is dispatching electricity at a lower price now than it was five years ago and yet businesses are facing electricity prices that are more than double, is an issue that has to be addressed." Indeed it does.

Although the rising cost of grid upgrades on electricity bills have been blamed on the uptake of renewable energy, particularly photovoltaic systems, it appears that the energy companies are profiteering. On-charging more of the grid maintenance and upgrades to the consumer equals greater dividends for the owners. The RET becomes the Trojan horse for a bunch of greedy grid owners, not to mention a Government on a crusade against the Labour Party's environmental initiatives.

Tough times call for tough measures, and sensible budget cuts make sense. But let's not throw the baby out with the bathwater.

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About the Author

Luke Beattie is involved in the renewable energy industry.

Creative Commons LicenseThis work is licensed under a Creative Commons License.

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