From my colleague Adam Walters:
On August 20 the Australian government announced the passage of a bill quadrupling its Renewable Energy Target (RET) to ensure that 20% (approximately 45,000 GWh) of Australia’s electricity is generated from renewable energy sources by 2020.
How does Australia’s RET Scheme Work?
The RET scheme is an expansion of Australia’s Mandatory RET scheme introduced in 2001, the first of its kind in the world. It works through the creation and sale of Renewable Energy Certificates (RECs) by renewable power generators to “liable parties” (mainly large-scale electricity utilities and consumers), who must provide a designated quantity of REC’s to Australia’s renewable energy regulator to demonstrate compliance and avoid having to pay charges for any shortfall. One of the changes brought about the new legislation is to increase from $40/MWh to $65/MWh.
Renewable energy sources eligible for accreditation under the RET scheme include: solar, wind, hydro, tidal, wave, biomass and geothermal, as well as solar water heaters and other smaller generation units. Hydro has historically dominated Australia’s renewable energy landscape, but recent project announcements and funding opportunities for wind and solar projects signal greater diversification of the industry, particularly for proven technologies.
Why should anyone care?
On a per capita basis Australia’s public investment in infrastructure in the last twenty years has dwarfed that of the U.S. Why? Aside from the infusion of tax revenues from Australia’s natural resources boom, the answer in short is a combination of political will and cooperation amongst Australia’s federal and state governments at a level that the U.S. can only dream of. This can be seen, for instance, in the Australia’s National Pubic Private Partnership (PPP) Policy Framework, a product of federal and state government cooperation to make Australia one of the world’s leaders in successfully implementing the PPP model as a vehicle for driving social infrastructure, transport and other large-scale development.
The new renewable energy target, coupled with recently announced government funding programs, such as the Clean Energy Initiative, and the emissions trading scheme the Rudd government has proposed (the Carbon Pollution Reduction Scheme), signals Australia’s commitment to renewable energy. This author, having experienced Australian innovation and willpower on large infrastructure projects first-hand, has little doubt that the new RET Target will herald the rapid expansion of commercial renewable energy power projects in Australia in the next decade.