Page 1112 - Week 03 - Thursday, 26 February 2009
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(Renewable Energy Premium) Act 2008. The current legislation as it stands provides for renewable energy generators to be paid at a premium rate for the electricity they generate and feed back into the electricity grid. The maximum rate is determined at approximately 3.88 times the price of retail electricity, providing considerable incentive to household and industrial installers to make the up-front investment in renewable energy infrastructure, knowing that by signing what is essentially a power purchase agreement with the electricity retailer they will recoup their investments and possibly also reap financial benefits thereafter.
When this bill was passed in the Assembly last year it was hailed as the most progressive piece of renewable energy policy in the country, and since then has been pointed to as a best-case example of the application of a feed-in tariff law by industry and NGOs alike.
The purpose of this amendment bill today is to tidy up some of the technical details so that the act can come into force on 1 March 2009, as negotiated through the ALP-Greens agreement, and householders can start to reap the benefits of their investments by receiving the tariff. This is four months earlier than scheduled and reflects the desire of the Greens to see faster action on renewable energy.
The purpose of the bill today is not to remove the capacity of the act to effectively drive investment in renewable energy for the larger end of the market. The government indicated when it tabled this bill that there is further work to do in applying this act to installations over 30 kilowatts, and we agree. However, we do not believe this should be used as an opportunity to add provisions that will effectively limit the scope of the act.
Though we will be supporting this bill today, we will be seeking to amend the bill, as Mr Seselja has foreshadowed. I have circulated a number of amendments. At this point, I am seeking to draft another amendment which may cover the point I have just made around ensuring that the objectives of the act are not changed, but that the cap is inserted at a different place. I will circulate that to members as soon as we have cleared it through advice.
There has been criticism in the past that feed-in tariffs are not the cheapest way to achieve greenhouse abatement and that more cost-efficient abatement can be made through the widespread rollout of energy efficiency measures. This is not something that the Greens disagree with. Energy efficiency is important. It is the cheapest, easiest way to deliver emission reductions, and there is plenty of low-hanging fruit here in the ACT. We need to insulate our houses and build new houses taking into account solar orientation. We need to use thermal mass effectively; consider how we share energy across our houses, communities and retail sectors; and set standards for energy use, particularly in industrial and retail buildings. All these things are crucial, because there is no doubt that it is cheaper for us to invest in measures that will reduce our consumption than it is to generate electricity from new sources.
Modelling has indicated that through energy efficiency measures alone Australia can reduce energy consumption by at least 16 per cent by 2020. Energy efficiency is also an important policy initiative to insulate us from the potential rises in energy prices
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