ClimateWire: In a bid to breathe life into Australia’s renewable energy project markets, the government proposed amendments to its renewable energy target last week, splitting up its goals for household markets and large-scale renewable energy project investments.
Six months ago, Parliament had crafted a plan to require 20 percent of the country’s energy to come from renewable sources by 2020. But the system, which required major energy companies to buy tradable renewable energy certificates, failed because the government issued credits to households that installed solar hot-water panels and heat pumps — flooding the market with cheap certificates and reducing their worth to large-scale projects.
The market for 45,000 gigawatt-hours of clean power was expected to bolster the finances of large-scale renewable energy projects worth about $19.5 billion, but the plan did not manage to support a single major project.
Climate Change Minister Penny Wong said on Friday that the amended plan, which requires large-scale schemes to deliver on the vast majority of the 2020 target, is “expected to deliver more renewable energy than the original 20 percent target and will ensure we build the clean energy future Australia needs.”
Specificity about how much of the clean energy must be provided by large-scale projects will give additional certainty to investors, she said. The planned changes would go into effect on Jan. 1, 2011.
The clean energy industry has said the changes will unblock large-scale projects planned by companies including AGL Energy Ltd. and Pacific Hydro. AGL CEO Michael Fraser had previously said that more than A$1 billion ($887 million) worth of planned renewable projects were stalled because of problems with the renewable energy target scheme.
The announcement gave a boost to the value of certificates from A$30 ($26) to A$42.50 ($37.70), though the value still falls short of its peak of A$53 ($47) when the original scheme was announced in the fall (Rob Taylor, Reuters, Feb. 26). – DFM