Renewables group defends aluminium exemption from RET

The peak body for wind and solar power has defended a plan to exempt the aluminium industry from the federal renewable energy target, saying it would come at only a trivial cost to consumers.

The Clean Energy Council (CEC) believes that by offering up some concessions to industry, it might salvage bipartisan support for the target.

The council has published figures that show a full exemption for the aluminium industry would cause household power bills to rise by just $2 to $4.50 a year, after it had ROAM consulting examine the impact on prices year by year up to 2030.

It comes as a government backbencher leading a charge by 25 Coalition MPs for a full exemption for the sector described a possible bipartisan deal on the proposal as a “game changer”.

The CEC’s report argues that an increase in household bills of $2 to $4.50 per year is “a very low cost for other electricity consumers” if the proposal can restore bipartisan support for the scheme.

Opposition Leader Bill Shorten said on Tuesday that Labor had agreed to discussions that would see the aluminium industry viewed as a “special case” on the condition that “the government does not try to wreck the renewable energy target”.

It is Labor’s first concession in the RET talks which have seen it at loggerheads with the government since the release of the Warburton review of the target in August.

The review, which has been widely criticised within both government and industry, recommended Australia’s target be either closed to new projects or scaled back dramatically on the basis of yearly reviews.

The Australian Financial Review is reporting on Wednesday that cabinet formally rejected the review’s recommendations on Tuesday.

About 70 per cent of the aluminium sector’s electricity use is already exempt from Australia’s renewable energy target of 41,000 gigawatt hours of renewable energy production annually by 2020.

A deal would see a full exemption for the industry, but Fairfax Media understands that Labor does not favour a reduction in the overall gigawatt hour target to account for the removal of the sector’s liability under the scheme.

Dan Tehan, the Liberal Party backbencher who has been a key agitator for the exemption, said the opposition’s signal it was open to the proposal was “a potential game changer” in terms of both parties being able to negotiate a bipartisan outcome.

But he said it was “logical” to lower the overall renewable energy target if the proposal was adopted so that the burden of exempting the sector “doesn’t fall heavily on other electricity users”.

“Most sensible people would question whether 41,000 GwH is a realistic target,” Mr Tehan said.

The CEC’s report argues against reducing the target because multiple studies, including the government’s own modelling, had shown that reducing the RET would eventually increase power prices.

Meanwhile, figures published by Pitt & Sherry have shown that emissions from electricity generation have risen since the repeal of the carbon tax.

The latest carbon emissions index figures found emissions were 1.3 per cent higher in September than they were in June, before the axing of the carbon price.

Principal consultant Hugh Saddler said this was partly because of the carbon tax repeal, but also due to reduced gas generation in NSW, Victoria and South Australia and less wind power generation than usual.

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