Big power company profits: the real outcome of any changes to the Renewable Energy Target

Weakening or abolishing the Renewable Energy Target (RET) would benefit owners of polluting coal plants at the expense of households and small business, finds independent analysis released today.

“Who really benefits from weakening the Renewable Energy Target?” is the question asked by The Climate Institute, Australian Conservation Foundation and WWF-Australia. Based on independent modelling by Jacobs, the report finds that a weakening of the RET as per companies’ proposals would result in:

• $8 billion additional profit to coal and $2 billion to gas generators (net present value of future profits 2015-
2030).This includes $2 billion in extra profit for EnergyAustralia, $1.5 billion for Origin and $1 billion for AGL.

• No decline in electricity prices: in fact, they could increase slightly (an average $30 increase to the annual
household power bill, with most of this increase taking place after 2020). This is consistent with modelling
commissioned by the Government and studies conducted independently by leading economic analysts.

• Additional carbon pollution of about 150 million tonnes to 2030 (equivalent to adding nearly 4 million cars to the
road) with additional pollution costs of over $14 billion.

• Loss of $8 billion in investment in new renewable capacity, with New South Wales and South Australia each
standing to lose over $2 billion in foregone investment.

“This modelling highlights the cynical self-interest behind power companies’ calls to weaken the Renewable Energy Target. Companies like Origin and EnergyAustralia are pushing to weaken the target not, as they like to claim, because that would be good for customers, but because a weaker target is better for their bottom line,” said John Connor, CEO The Climate Institute.

“The RET is a bipartisan policy that is effectively reducing carbon pollution from the electricity sector and building our nation’s renewable energy industry. Both these objectives are vital – they help avoid dangerous climate change and sensibly position Australia’s economy to remain competitive in a world moving to clean energy sources.”

Various power companies and industry lobby groups want to weaken the RET, or to do away with it altogether. However, any change to the legislated target will need to be agreed by the Senate.
“Some of the claims that have been made do not stack up against the clear evidence and are a distraction from who would really benefit from reducing the amount of clean renewable energy in the electricity market,” said Dr Cassandra Goldie, CEO of ACOSS.

“We need to be investing in the future – in clean energy for people in Australia, energy efficiency measures particularly for people on low incomes and in new jobs in sectors that are growing around the world.”

Kelly O’Shanassy, Australian Conservation Foundation CEO said: “These power companies are trying to hide behind the customers as they work to undermine Australia’s efforts to become a clean energy leader. This research shows the power companies have eight billion reasons to attack clean energy and they have actually forgotten about their customers – and the air we all breathe.”

Dermot O’Gorman, WWF-Australia CEO said: “Renewable energy is crucial to combating climate change and helping protect the Great Barrier Reef and much of our unique wildlife.”
“Australia has a natural advantage in solar and wind energy. We must build our renewable energy industry instead of supporting old, dirty power stations. The RET benefits jobs, the economy and the environment,” he said.

The full report telling the story of “Who really benefits” can be found here.

For more information
Kristina Stefanova | Communications Director, The Climate Institute | 0407 004 037
Josh Meadows | Media Advisor, Australian Conservation Foundation| 0439 342 992
Mark Symons | Senior Media Officer, WWF-Australia | 0400 985 571