Aussie govt may back away from clean energy target

Josh Frydenberg, Australia’s energy minister, has hinted that the clean energy target (CET) may no longer be needed as the steeply falling costs for renewables are undermining the case for subsidies after 2020.

In a keynote address to the Australian Financial Review's National Energy Summit on Monday, Frydenberg stressed on the “declining cost curve” for the development of wind, solar and renewable storage projects and noted that carbon dioxide (CO2) emissions cannot be lowered at the expense of reliability and affordability. The Minister expressed beliefs that in view of the rapidly declining cost for renewables in Australia, the country could reduce its carbon footprint without the scheme.

"It is challenging but possible to simultaneously put downward pressure on prices and enhance the reliability of the system, while meeting our international emissions reduction targets," Frydenberg said as cited by the Australian Financial Review.

The government will make a decision on a new CET, which subsidises renewables, in the coming months. The incentive scheme was recommended to it by the country’s Chief Scientist Alan Finkel this summer in a review of Australia’s National Electricity Market (NEM). The CET was one of the 50 recommendations that the government did not accept.

Meanwhile, Frank Calabria, the CEO of the country’s largest utility Origin Energy Ltd (ASX:ORG), urged the government to immediately adopt the CET scheme as investment without it would be haphazard. "The real purpose [of the clean energy target] is not to subsidise renewables but to make a timely investment in new generation," he told the ABC News.

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