Page 891 - Week 03 - Tuesday, 16 March 2010
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I am pleased to table in the Assembly today advice received from the Independent Competition and Regulatory Commission on the electricity feed-in renewable energy premium: determination of premium rate for 2010-11. The ACT electricity feed-in tariff scheme is aimed at supporting ACT households and small businesses and applies to generation facilities of no more than 30-kilowatt capacity.
The scheme commenced on 1 March last year and, since then, more than 1,500 Canberra households are now participating in the scheme. The scheme is open to all ACT electricity account holders, with the exception of most commonwealth and ACT government agencies, and pays a premium price for every unit of renewable energy produced from solar or wind technologies.
Under section 10 of the Electricity Feed-in (Renewable Energy Premium) Act 2008, I am required to seek the advice of the ICRC in determining the premium rate to be paid to generators of renewable energy under the feed-in tariff scheme. The premium rate is to be set by disallowable instrument each year not less than three months before the beginning of that year. That is a financial year. I am also required under the act to present the ICRC advice to members of the Assembly within three sitting days of its receipt by me.
I sought the advice of the ACRC in December 2009 on determining a premium rate for 2010-11 and for the development of an ongoing model for reviewing future prices. The ICRC released a draft report for public comment in February 2010. Following the comments received, the ICRC reviewed its recommendations regarding the premium and released their final report, which I have tabled today.
The report suggests a decrease in the premium price to 45.7c per kilowatt-hour, a reduction of about 8.7 per cent on the current level; that this price be set for a period of two years to create investor certainty; and that the existing 80 per cent premium price applied to generators over 10 kilowatts and up to 30 kilowatts be removed to further encourage small business participation in the scheme. I will be taking these recommendations into consideration when I make my determination of the premium rate later this month.
MR RATTENBURY (Molonglo): The Greens strongly support the ACT’s feed-in tariff scheme as an effective mechanism for providing an incentive to encourage private investment in renewable energy generation by delivering certainty to investors in the form of a guaranteed price over a fixed time. We also consider the feed-in tariff a key driver in stimulating industry growth in renewable energy generation.
With regard to determining the future premium price, the Greens supported the general thrust of the draft report from the ICRC that the premium should be set at an “amount that is required to provide sufficient incentive to make the installation of renewable generation attractive against other similar risk-free investments”. However, we encourage the return on investment to be slightly higher than the standard return on a cash investment. In essence, we would prefer that people invest their money in solar panels rather than simply putting it in the bank. We also support the premise that the premium price should be set at a level that does not excessively impact on the rest of the economy, nor provide excessive profits for those who do invest in renewable energy generation.
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