Australia’s largest electricity retailer, ERM power, says that the country will not meet its renewable Energy target of 23% by 2020. It also means customers will be forced to pay higher prices for no environmental gain as reported by the Financial Times.
Despite the growing unrest from the business community about the push towards clean energy, ERM founder Trevor St Baker said the Turnbull government might have to consider amending the legislated RET of 33,000 gigawatt-hours again before the decade ends.
He argued that it’s impossible to get there and it should have been 20,000 gigawatt-hours, which is a more reasonable target. The target should be to reduce greenhouse gases. Brendan Pearson, Minerals Council of Australia chief executive, said there should be a clear-eyed assessment of whether the RET is achievable, stating that it added $3 billion to the energy costs of households and business every year.
Energy Minister Josh Frydenberg said that there would be no changes to the 2020 RET while admitting that it would be a real challenge to achieve. He also said that the Turnbull Government is unlikely to commit to a new target for 2030, given the investments contracted in the next few years are likely to run in the next ten years.
It was also stated last week that ERM will pay a penalty of about $123 million as part of its 2016 liability under the RET instead of surrendering its full quota of Large-scale Generation Certificates. This scheme allows a retailer three years to make up for the loss by surrendering LGCs at a later date.
If the target is missed, consumers will be paying higher prices that will cover the cost of additional renewable energy generation.