Renewable energy deal close but not quite

THE clean energy sector is warning against investment-risking “messy” negotiations, after the government and Labor agreed in part to a pared-back renewable energy target.

AFTER months of political stalemate, the two parties struck a deal on Friday to slash the target from 41,000GWh to 33,000 but bipartisanship on the entire package remains in doubt.

The opposition won’t support what it labels a “last-minute, red-herring” inclusion of wood waste fuel as a renewable source and will try to exclude the provision from the legislation. Industry Minister Ian Macfarlane believes he doesn’t need Labor’s support and is confident he’ll win over crucial crossbench senators to help him include the source – also known as biomass fuel.

The Clean Energy Council, the sector’s peak body, is concerned that could end in messy negotiations on the floor of parliament that would deter investors from injecting billions into the industry.

Both parties and industry believe bipartisanship is key to restore confidence for investment.

If renewable targets aren’t met, consumers may have to foot the fines imposed on energy companies. Opposition environment spokesman Mark Butler hopes the wood waste inclusion is a “stunt” and is determined not to let the deal “disappear” because of it.

Biomass fuel releases carbon into the atmosphere but is argued to be emissions neutral because the carbon extracted by the living trees offsets the CO2 released when burned.

Despite the niggling disagreement, the deal on the 33,000GWh for large-scale resources like wind farms is viewed by both sides of politics and the clean energy sector as a positive step forward.

It includes no changes to the roof-top solar program and potentially ends months of industry uncertainty, stalled investment and clean energy job losses.

The government announced plans to slash the RET – which requires 20 per cent of Australia’s power to come from renewables by 2020 – amid concerns the legislated target would overreach that goal due to falling energy demand.

Cabinet on Thursday approved an increase from 32,000GWh, after two coalition MPs broke ranks calling for an end to the political impasse and peak business groups backed a concession.

Labor had been backing the clean energy industry’s compromise of 33,500.

Both Labor and the government will take the deal back to their party rooms for approval but Environment Minister Greg Hunt hopes it will be the end of deadlock.

“I hope we can just get on with the job of producing energy,” he told reporters in Melbourne.

The Clean Energy Council urged both parties to quickly resolve any outstanding issues.

“No-one in the industry is happy about the prospect of a reduced target for large-scale renewable energy, but it is time to put this issue to rest,” chief executive Kane Thornton said.

But the Australian Greens, who have long campaigned for no change to the target, are furious about the agreement claiming it will rip $4 billion away from the sector.

“Labor has done a devil’s deal with a climate change denier that will kill the jobs in big solar,” Greens MP Adam Bandt told reporters in Melbourne.

The Climate Institute believes the deal is “at best a Band Aid” and doesn’t address Australia’s inefficient and dirty power problems.

Labor will look at increasing the target if elected next year.

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