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Minister for the Environment, Water, Heritage and the Arts 2001-2004

The Hon Dr David Kemp, MP

 

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Media Release
Federal Minister for the Environment and Heritage
Dr David Kemp

15 June 2004

MRET: adding muscle, not fat


The Howard Government has today re-confirmed its commitment to the Mandatory Renewable Energy Target (MRET) at the current level of 9,500 GWh by 2010 and will move to improve the operational and administrative efficiency of the scheme.

"The role of MRET is two-fold - to encourage investment in renewable energy technologies and to reduce greenhouse gas emissions," said Dr Kemp.

"The Howard Government believes that MRET has been successful and will continue to be so. Since coming into effect in 2001, MRET has delivered an increasing amount of renewable electricity in Australia and generated investment of more than $1 billion in new renewable energy projects, with an additional $1 billion either committed or planned."

The Government believes, however, that the time has come to target support for renewable energy by addressing technical and regulatory barriers to its widespread take-up rather than raising the general industry subsidies implicit in MRET - $5 billion by 2020 at the 20,000 GWh level proposed by the Tambling Panel, and $11 billion by 2020 at Labor's proposed level.

"Australia has a rich and unique resource base. It is important that we capitalize on these natural assets to satisfy our growing energy needs by driving costs down, while moving strongly to reduce the levels of greenhouse gas from energy use.

"Renewables have an exciting role to play in Australia's energy mix. Today's White Paper offers much more than a mandatory safety net for renewables - it provides a launch pad to a new era of development," said Dr Kemp.

The suite of initiatives that will assist this development include a $500 million Low Emissions Technology Fund, $100 million Renewable Energy Development initiative, $75 million Solar Cities trial, $20 million Advanced Electricity Storage Technologies, and $14 million Wind Forecasting Capability.

The changes to strengthen MRET include enhancing market transparency, increasing opportunities for bioenergy and solar technologies, improving business certainty, and encouraging innovation through recognising emerging renewable electricity generation technologies.

The Government will establish time limits for the creation of RECs, and publish additional data on baselines and renewable electricity generation. This will provide investors and industry proponents with a better understanding of the REC market and minimize the potential for large generators to impact on REC prices.

Current REC restrictions on solar hot water systems will be removed, while the deeming period for photovoltaics will be extended and the threshold capacity for small units increased to 100 kilowatts. This will benefit the operation of Australia's National Electricity Market.

The compliance burden for bioenergy will be reduced. Plantations will be redefined as an 'energy crop' and the 'primary purpose' financial test will be removed. This will facilitate the use of biomass for energy generation where it realizes the highest value return for that investment. Eligibility requirements for biomass from landfill sites will also be streamlined so that all biomass material directly sourced from a licenced landfill can be regarded as municipal solid waste.

Provisional accreditation for proposed generation projects will be introduced, and a six-week limit placed on the assessment of accreditation applications. The Minister for the Environment and Heritage will also be able to determine the eligibility of new renewable energy sources.

"An MRET with improved efficiency and effectiveness will continue to play a key role in Australia achieving its internationally agreed greenhouse gas emissions reduction target," Dr Kemp said.

Commonwealth of Australia