RET review > Check the facts
The Renewable Energy Target (RET) is generally considered as having a target that will mean 20 per cent of electricity is generated from renewable sources by 2020.
The Warburton RET review modelled five options for changing the RET and recommended two.
The first is what is known as “grandfathering” the RET. This is a process where the RET will be closed to any new renewable projects, and the amount of renewable energy supported by the RET will stay at its current level.
The other option that the review recommended was to set the target for renewable energy to provide half of any new growth in electricity demand. If electricity demand were to grow strongly then the target would increase more rapidly. If demand for electricity grew slowly, the renewable energy target would also grow slowly.
In understanding this option, it is important to note that electricity demand has been falling since 2010. If electricity demand continues to fall, half of new growth is zero. This effectively means there will be no additional renewable energy added to the target, and the growth option will be the same as “grandfathering” the RET.
Modelling conducted for the Warburton Review used Australian Energy Market Operator (AEMO) growth forecasts for electricity demand. The forecast assumes reasonable growth in the target, with electricity generated from renewables increasing by 16,000 MW/h to about 25,000 MW/h above current levels by 2020.
But most recently, the AEMO have significantly over estimated electricity demand. Up until the last five years, demand for electricity had been rising since the 1950s. Since 2009, electricity demand has consistently dropped.
If the government adopts the 50 per cent growth target, based on overly optimistic growth rates – which go against recent trends in electricity demand – then the RET will effectively be switched off to new projects. The equivalent of “grandfathering” the scheme.