The RET is driving all investment in wind power in Australia but is currently under review by the Climate Change Authority, an independent government advisory body. The authority is accepting submissions and is due to hand its recommendations to the federal government by the end of 2012.
"Right now is not the time to make changes to the RET," said Russell Marsh, policy director at the Clean Energy Council. "If the authority and the government leave the RET alone, then we will see the certainty that is starting to return to the industry continue, and we might actually see quite a quick upturn of projects being brought forward to construction."
The Australian wind market has been flat for more than 12 months due to an oversupply of Renewable Energy Certificates (RECs), which must be purchased by liable entities to demonstrate compliance with the RET. The oversupply was caused by a design fault, which was addressed in early 2011 with the creation of the Large-scale Renewable Energy Target (LRET).
The REC market is now showing signs of rebound, with energy supplier Truenergy signing two power purchase agreements in September, with the 108MW Taralga wind farm and the 66-turbine Boco Rock project, both in the state of New South Wales. Meridian Energy has also confirmed it will proceed with its 131MW Mt Mercer project in Victoria.
However, the recent call by some electricity retailers with liabilities under the LRET for the target to be linked to energy demand rather than remaining fixed at 41,000 GWh, has spooked the wind industry, which is weary of legislative change.
"It's been a real rollercoaster of policy over the past decade and now we just need a bit of flat running so we can actually deliver some projects," said Andrew Richards, executive manager, government and corporate affairs with Pacific Hydro. "This constant changing, and the idea that we can move to some floating forever-variable target, is not how you grow an industry."
The RET has bipartisan political support in its current form, and Richards said that linking the LRET to energy demand would effectively cut the target in half, as Australia's energy consumption is in decline. "It would lead to about a 50-60% drop in the price of certificates, which would have a dramatic effect on investment," he added.
"We are pushing very hard for investor certainty and to keep the RET how it is."