NEWS

Renewable energy stopped and electricity bills increased

29 August 2014

Infigen Energy welcomes the public release of the Renewable Energy Target (RET) Review Panel’s report to the Government.

Infigen is very disappointed that the Panel has recommended that the Government choose between two scenarios that would decimate the renewable energy industry in Australia for the foreseeable future and increase electricity bills for consumers.

Benefits to electricity consumers overlooked

One of the primary purposes of this review was to consider the effect that the scheme was having on the cost of electricity to consumers. The Panel’s own modelling concluded that the RET will result in a net benefit for consumers of 3-4% per annum compared with the “closed to new entrant” scenario recommended by the Panel.

The Panel has recommended that the Government adopt revised policies that result in the worst outcomes for electricity consumers. This flies in the face of the Coalition’s stated objective to take pressure off Australian households via lower electricity prices.

Managing Director of Infigen, Miles George said, “The claims that the RET would drive up electricity prices have once again been shown to be incorrect.”

The primary beneficiaries of the Panel’s recommendations are the large electricity retailers and coal fired generators, who already control 75% of the market. A cut to the RET would effectively eliminate any competition for those already dominant fossil fuel focussed companies.

Panel recommendations driven by ideology, not knowledge and experience

Although the Panel consulted widely with the industry, very few, if any, electricity market participants have called for the dramatic cuts to the targets recommended by the Panel. The combined knowledge and experience of the electricity industry has been ignored by the Panel.

The review was performed by a panel appointed by the Government rather than by the Climate Change Authority as required by the RET legislation. The Panel’s recommendations are not supported by the factual evidence gathered by the review, indeed they are stunningly at odds with that evidence. Without the support of the evidence gathered by the review, the recommendations are clearly driven by ideology.

We welcome the fact that the government has made the report public. It is vital that the views of those with knowledge of the commercial implications of these value destroying and Australian national reputation damaging recommendations are considered by the Government in determining its response.

As the Government represented a totally different policy position going into the 2013 Federal election, the Australian community and voters are also entitled to have their say on these important matters for our economy, our jobs and our environment. The Panel’s foundation for its recommendations contradicts the Coalition’s declared support for the RET in the lead up to the last Federal election.

Notwithstanding the serious flaws in the major recommendations, Infigen supports the Panel’s recommendations in relation to the administrative aspects of the scheme, including abolishing statutory reviews.

Existing assets must be protected

The Panel’s recommendation to consult further with industry should the Government seek to implement any of the recommendations is critical. If the Government is minded to adopt any of the Panel’s recommendations then the arrangements that will be needed to protect the value of existing assets will be crucial and must be developed with the assistance of people with the requisite specialised knowledge. Failing to devise and implement effective arrangements that work as intended would be very damaging for Australia’s reputation as a safe and reliable place to invest.

ENDS

For further information please contact:
Richard Farrell, Investor Relations Manager
Tel +61 2 8031 9900