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Inconvenient accounting for State renewables ambitions

By Geoff Carmody - posted Friday, 2 March 2018


Announcing new and increased renewable energy targets (RETs) has become a popular state and territory political pastime. 

A stocktake of these fast-breeding renewables rabbits is as follows(renewables as a % of total electricity power generation):

National RET:  23.5% by 2020.

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  • NSW ‘RET’: state-wide, ‘zero net emissions’ by 2050 (ie, a target covering more than electricity).
  • Victorian RET:  25% by 2020 and 40% by 2025 (and ‘zero net emissions’ by 2050?).
  • Queensland RET:  50% by 2030.
  • WA RET:  23.5% by 2020 (ie, the national RET).
  • SA RET:  50% by 2025 (now updated by the caretaker SA Government to 75% by 2025, plus a 25% renewables storage target).
  • Tasmanian RET:  100% by 2022.
  • ACT RET:  100% by 2020.
  • NT RET:  50% by 2030.

Some targets are legislated (eg, the national target and Victoria’s).  Others (eg, Queensland, South Australia, the ACT) are ‘aspirational’.  The national RET is not supported by all political parties.  Others aren’t either.  I think this stocktake is up to date.

Sorry to be boring, but how do we consistently account for these different RETs, and performance towards them?

Globally, those pushing for emissions reductions are mainly fixated on a national emissions production accounting framework.  We too.

I’ve argued since 2008 this is a policy approach sowing the seeds of its own destruction.  It’s a policy own-goal.  Anyway …

Will we follow this production-based accounting framework for state and territory emissions endeavours?  Doesn’t seem likely.

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Our most ambitious territory, the ACT, trumpets 100% renewables by 2020.  Its Government says achievement requires renewables imports from other states (probably lots).  A large proportion of ACT power consumption will be imports of renewables production from elsewhere.  Under production accounting, ACT imports should count towards increased renewables production in the states exporting them to the ACT, not ACT production. 

Clearly, the ACT Government will want to claim these imports towards its own RET.  If it does so, they must be subtracted from the exporting state’s RET (eg, South Australia).   Otherwise we’d be double-counting them, Australia-wide. 

The ‘renewables headline’ state, South Australia, has lots of renewables generation (when the sun is shining and the wind is blowing).  It has literally blown-up roughly-equivalent, cheaper, and more reliable coal-fired power plants.  Under production accounting, it should claim all the credit for its indigenous renewables power generation.  That includes exports to Victoria and, if it happens, to the ACT. 

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About the Author

Geoff Carmody is Director, Geoff Carmody & Associates, a former co-founder of Access Economics, and before that was a senior officer in the Commonwealth Treasury. He favours a national consumption-based climate policy, preferably using a carbon tax to put a price on carbon. He has prepared papers entitled Effective climate change policy: the seven Cs. Paper #1: Some design principles for evaluating greenhouse gas abatement policies. Paper #2: Implementing design principles for effective climate change policy. Paper #3: ETS or carbon tax?

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