Climate Change Minister Greg Combet says power prices would be pushed up under the coalition plan to keep the renewable energy target (RET) but scrap carbon pricing.
The Climate Change Authority has launched a review of the RET, but the minister said this would not result in it being scrapped, but rather refined in terms of its economic and environmental effectiveness.
The RET is aimed at ensuring 20 per cent of Australia’s electricity comes from renewable sources by 2020.
In a Clean Energy Week speech in Sydney on Wednesday, Mr Combet defended the RET, saying it worked well with the carbon price to boost investment in green technology and cut emissions.
The carbon price without a RET would mean Australia could not achieve its goal of having 20 per cent of electricity supply coming from renewable sources by 2020, he said.
It also put at risk the estimated $20 billion of planned investment in renewable energy.
Mr Combet said he did not believe a federal coalition government would scrap the carbon price, as doing so - but keeping the RET - would push up power prices.
The Australian Energy Market Commission had estimated the extra cost to electricity users from not having a carbon price, but keeping in place the RET, would be in the order of $20 billion in 2010/11 dollar value over the period to 2030.
This reflected the possibility of electricity retailers, in the absence of a carbon price, choosing to pay the penalty price of the RET scheme rather than support investment in new renewable generation in an environment of low wholesale prices and reduced electricity demand, Mr Combet said.
“This is another key reason why a coalition government will not make a serious attempt to undo carbon pricing - no matter how much political blood is pledged on the subject.”
As polls continue to show majority public opposition to the carbon tax, Mr Combet called on industry leaders to make a greater effort to explain to the community “why this transformation is important, how your solutions contribute to this transformation and why a comprehensive set of policies is essential”.
