Chapter 5. Other issues for the review
This chapter considers two issues—the diversity of access and uptake for renewable
technologies under the RET, and the role and appropriate frequency for statutory reviews
of the scheme. The first issue is a statutory requirement of the Authority's RET reviews.
On both issues, the Authority is inclined to reiterate the conclusions made in its 2012
reviews, namely that no change should be made to the RET to encourage particular
technologies, and that statutory reviews should be conducted every four years rather than
every two years.
5.1. Diversity of access and uptake
The Authority has a statutory obligation to review diversity of access of renewable technologies
to the scheme.
In its 2012 RET review, the Authority considered various measures that could be used to
promote diversity of access and uptake, including:
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Multipliers, which could be applied to certificates from particular technologies to
increase their uptake.
A cap, which could be used to limit the total amount of generation from a particular
technology, increasing the share of the target available to other eligible technologies.
Banding, which would set a quota for total generation from each eligible technology. By
assigning particular targets to different technologies, banding allows each technology the
space to evolve without potentially being 'crowded out' by other technologies that might
be cheaper in the short term.
The design of the LRET—which is neutral between renewable technologies—encourages the
deployment of the lowest cost technologies, thereby minimising the costs to consumers of
meeting a given target.
In 2012, the Authority concluded that the adoption of any measure to promote diversity within
the RET, such as expanding the use of multipliers, or introducing banding or caps, would
increase the costs of the scheme to consumers, and to the community as a whole. The Authority's
view remains that the present approach should continue and that the current level of diversity of
access is appropriate at this time. As recommended in section 3.4, the question of access to the
scheme would warrant further consideration in the event the LRET were to be increased and
extended in the period beyond 2020.
Conclusion
C 5. No changes should be made to the Renewable Energy Target framework to promote
diversity of renewable technologies at this time.
5.2. Future statutory reviews
Currently, the REE Act requires the Authority to conduct reviews of the RET every two years.
When the Authority considered the review schedule in 2012 it concluded that full reviews every
four years would provide an appropriate balance between policy flexibility and investor
certainty. This is a position shared with many stakeholders—in submissions to the Warburton
review and the Authority, the vast majority of participants addressing this issue argued for less
frequent reviews—or no statutory reviews at all.
Statutory reviews that are transparent, predictable and principles-based are a valuable part of the
governance of any major policy. In the context of the RET, they allow the tracking of progress
towards nominated targets and evaluation of performance based on the goals of the scheme.
They also allow actual and potential problems to be identified—and possible solutions to be
explored in a formal (if stretched) timeframe.
As recent experience has demonstrated, frequent reviews of the RET in an environment lacking
bipartisan political support for the scheme can cause investment and employment in the
renewables industry to stall and fall. The Authority looks forward to an early resolution of
uncertainty surrounding the RET, and especially the 2020 LRET target. In that event, the level
and timing of the re-negotiated 2020 LRET target could be deemed to be outside the scope of
future RET reviews.
A likely major issue for consideration in the next statutory review (assuming this is in 2018) is
the possible role of the RET in the period beyond 2020, including its place in the overall post2020 policy framework. As noted earlier, in the absence of more comprehensive, cost-effective
measures to reduce emissions in the electricity sector, consideration would need to be given to
increasing and extending the RET targets post 2020, along with eligibility for certificate creation
(see section 3.4).
The Authority remains of the view that its previous suggestion that statutory reviews of the RET
occur every four years strikes a reasonable balance between the need for policy flexibility and
the risks to investor confidence created by too frequent reviews.
Conclusion
C 6. In the interest of maintaining investor confidence in the industry, the frequency of
statutory reviews of the RET should be changed from every two years to every four years.
For the same reason, if bipartisan agreement were to be reached on any revisions to the
current 2020 LRET target, those revised arrangements should be outside the scope of
future reviews.