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Chapter 1 About this review
This chapter outlines the scope and context of the Climate Change Authority’s
2014 Renewable Energy Target (RET) review. It provides information about the
Authority and its approach to the review.
1.1. The Climate Change Authority
The Climate Change Authority ('Authority') is an independent statutory agency, established to
provide expert advice on Australian climate change policy, including through a scheduled series
of reviews of climate programs and legislation.
The Authority currently comprises a Chair (Mr Bernie Fraser) and four members with expertise
including in climate science, economics, and public policy. Its work is guided by a set of
principles under the Climate Change Authority Act 2011 (Cth), which requires the Authority to
have regard to the following matters:
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economic efficiency
environmental effectiveness
equity
the public interest
the impact on households, business, workers and communities
the development of an effective global response to climate change
Australia’s foreign policy and trade objectives
any additional principles the Authority considers relevant.
1.2. Approach and context
The Authority's requirements for reviewing the RET are set out in the Renewable Energy
(Electricity) Act 2000 (Cth) (the REE Act) and Climate Change Authority Act 2011 (Cth) (see
Appendix B). Any recommendations must be consistent with the objects of the REE Act (s. 3)
which are to:
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encourage the additional generation of electricity from renewable sources
reduce emissions of greenhouse gases in the electricity sector
ensure that renewable energy sources are ecologically sustainable.
The Authority reviewed the RET in 2012. In that review the Authority emphasised the role of the
RET in reducing emissions and the importance of a stable and predictable policy environment to
its success. It concluded that no major changes were warranted to the overall scheme, but
suggested some minor operational changes.
The Authority conducted its 2012 review against the policy backdrop existing at that time. Since
then, significant changes have occurred. In particular, the carbon pricing mechanism has been
repealed and the outlook for electricity demand is more subdued than it was in 2012.
The government initiated a new review of the RET in 2014 by a panel headed by Mr Dick
Warburton AO LVO, and supported by a secretariat located within the Department of the Prime
Minister and Cabinet. The report of the Expert Panel (hereafter, the 'Warburton review' report)
was released in August 2014. The review concluded that the cost of the RET outweighed its
benefits and that significant change was required. The review recommended that:
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the Large-scale Renewable Energy Target (LRET) be either closed to new entrants or
modified so that targets to 2020 are set one year in advance and increase by half of
projected additional electricity demand in that year.
the Small-scale Renewable Energy Scheme (SRES) be either terminated immediately or
phased out more rapidly (by 2020 rather than 2030).
A full list of the Authority's 2012 recommendations and those of the 2014 Warburton review are
at Appendix C. Consistent with its 2012 report and in line with its legislative requirements, the
Authority's 2014 RET review pays particular attention to:
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the objective of reducing emissions (both now and in the longer term)
the research demonstrating the crucial role that decarbonisation of the electricity sector
will play as Australia and the world move to a low-emissions economy.
The Authority concluded in its 2012 review that two-yearly reviews of the RET risked
undermining policy stability and investment in the sector and recommended that they occur only
every four years (CCA 2012, p. 39); this recommendation has not been implemented and the
Authority's statutory obligation to conduct this review remains in place.
1.3. Scope of review and report structure
This review covers a small number of issues which the Authority believes are of most
significance at this time. The lingering uncertainty about the future of the Authority has also
necessitated the fairly narrow focus of the review. As appropriate, the Authority has drawn on
previous consultation and analysis from both the 2012 Authority review and this year’s
Warburton review.
The important issues considered by the Authority include:
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The role of the electricity and renewables sectors in contributing to the goal of keeping
global average warming to below 2 degrees (chapter 2).
The case for rescheduling the LRET target; the appropriateness of current assistance to
emissions-intensive, trade-exposed activities; and the role of the RET after 2020 (chapter
3).
Whether any changes should be made to the level of assistance provided to small-scale
solar photovoltaic (PV) generation under the SRES (chapter 4).
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Whether any changes to the RET design to promote access by more diverse renewable
technologies are warranted; and the appropriate frequency of statutory reviews of the
RET (chapter 5).
The limited scope of this review has meant that some questions, such as the treatment of larger,
commercial-scale PV, could not be addressed on this occasion. For the same reason the
Authority did not commission additional economic modelling of the electricity sector for this
review, but has drawn on several previous exercises including modelling commissioned for the
Authority’s earlier review and the Warburton review.
1.4. Consultation
The Authority has reviewed the public submissions made to the Warburton review, and met with
and secured input from interested stakeholders (see Appendix A for a list of submissions
received). The Authority would like to thank the people and organisations who contributed time
and expertise to the review.