The federal government has this afternoon released its review of the Renewable Energy Target.
It concludes the costs of the scheme “outweigh its benefits” and has recommended the scheme either be shelved or changed.
It estimates the current RET would require a further $22 billion in cross-subsidies to the renewables sector until 2020. That figure is on top of the $9.4 billion cross-subsidy paid out between 2001 and 2013.
“This investment comes at the expense of investment elsewhere in the economy and the additional generation capacity is not required to meet the demand for electricity,” the report said.
“RET is a high cost approach to reducing emissions because it does not directly target emissions and it only focuses on electricity generation.”
The report recognises since the RET was implemented in 2010 the generation of renewable electricity has doubled and it is exerting some downward pressure on wholesale electricity prices. Meanwhile demand for electricity in Australia is also falling as a result of increased efficiency of power-sucking appliances and the like.
“To date, the RET has delivered a modest level of emissions reductions,” the report said, adding the renewables industry is now established and its output are exceeding the levels anticipated for 2020.
Here’s the full report.
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