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Senator the Hon Robert Hill
Leader of the Government in the Senate
Minister for the Environment and Heritage
29 November 1999
The Federal Government today confirmed arrangements to deliver the Prime Minister's commitment to boost the contribution of the renewable energy industry to Australia's electricity supply by 2 percent.
Environment Minister Robert Hill said the 2 percent measure would be phased in from January 2001, providing a major boost to generators of new renewable energy over the next ten years.
"They will be able to invest in new technologies with greater confidence that they will have a market for their product. This investment will lead to a reduction in the costs of generating electricity from renewable sources as cost has been a major barrier to increased market penetration in the past," Senator Hill said.
In his 1997 Statement, Safeguarding the Future, the Prime Minister announced a series of targeted measures to ensure that Australia will meet its Kyoto commitment. The Statement includes the measure to boost the sale of renewable energy to electricity retailers and large purchasers (liable parties) by 2 percent in 2010.
"The increased generation of renewable energy will produce a positive greenhouse outcome for Australia," Senator Hill said.
"The Government will introduce legislation next year to ensure that the measure commences in January 2001."
Senator Hill said the Government recognised the potential in harnessing waste coal mine gas for power and remained committed to work with industry to examine ways to encourage the utilisation of gases generated from non-renewable sources.
"Although coal methane has not been included in this measure, emission strategies will be further examined as we develop and implement the $400 million Greenhouse Gas Abatement Program."
Senator Hill said the design allows the market to find the least cost response to meeting the target and develop innovative responses that would not be as likely to occur under a centrally administered scheme.
More (2) "The measure will be implemented using a system of tradeable certificates as proposed by the Renewable Target Working Group (RTWG). The RTWG held consultations with industry over an 18 month period to determine the most appropriate and cost-effective option," Senator Hill said.
"Certainty for industry to plan for the measure has been provided by fixing the target at 9,500 gigawatt hours and capping penalties for liable parties who fail to meet their purchase obligation at $40 per megawatt hour."
Senator Hill said self generators (private generators who supply their own power requirements) and small grid operators (less than 100 megawatt) will not be included in the measure.
Senator Hill thanked industry, state and community stakeholders who had assisted the Government to develop the measure over the past 18 months, through the Australian Greenhouse Office.
"Their input has ensured a win-win outcome, providing industry certainty at lowest cost, whilst at the same time ensuring Australia will be one of the world's leading nations in terms of renewable energy generation," Senator Hill said.
Rod Bruem (Senator Hill) (02) 6277 7640 or 0419 258 364
Carol Bartley (Australian Greenhouse Office) 0412 994 800