The head of one of Australia’s biggest energy companies has blasted rivals for fuelling uncertainty over the renewable energy target (RET) and for misrepresenting the costs of clean sources of power.
AGL chief executive Michael Fraser said some companies were guilty of inconsistency in calling for stability in government policy, and then seeking to undermine it.
The policy under attack is the Rudd government’s commitment to achieve 41,000 gigawatt-hours in electricity from large-scale renewable energy sources by 2020.
“This is one policy that has bipartisan support and yet the same people calling for policy stability are calling for change,” Mr Fraser said.
While Mr Fraser did not name AGL’s competitors, both Origin Energy and EnergyAustralia have called for the 2020 renewable energy target to be reduced. They argue that its original goal, to supply 20 per cent of power by the decade’s end from clean energy, will likely be closer to 26 per cent or higher because of the unexpected slide in overall power demand.
Mr Fraser said that while Coalition Senator Simon Birmingham last week affirmed support for the 41,000 gigawatt-hour target, uncertainty remained over scheduling.
The legislated RET review in 2014 meant that those doubts would linger well after the election, holding back investment, he said.
The AGL chief was speaking after his company unveiled two large-scale solar energy plants for outback NSW capable of supplying 50,000 homes. At a total cost of $450 million, the ventures are some 15 times the current largest utility-scale solar plant in Australia.
Mr Fraser said RET opponents had also exaggerated the cost of renewable energy by claiming more gas-fired peaking capacity was needed to handle them. “There’s not one shred of evidence of one peaking plant built anywhere in the country to back up renewables.”
Over-supplied
The Energy Supply Association of Australia, an industry group, said the addition of extra generating capacity to an over-supplied market was raising the marginal cost of power production as it displaces low-cost generation.
“The RET’s not free, but it’s certainly not the entire reason for rising power bills,” Andrew Dillon, ESAA’s general manager for corporate affairs, said. “We need to have the RET review that’s legislated for next year and then lock in the path to 2020.”
AGL’s own assets were “balanced”, Mr Fraser said, noting it already ran the country’s biggest wind farm, at Macarthur, the largest brown coal-fired power plant, in Victoria, and the largest gas-fired plant, in South Australia.
Dragging on renewables growth, however, was that Australia might have some 9000MW of surplus generation capacity, he said.
