The new RET – unleashing new renewable energy jobs

On 26 February the government announced a major structural change to the Renewable Energy Target (RET) Scheme, with plans to carve out small-scale renewable technologies into a separate fixed-price scheme. Small-scale technologies will still be able to generate Renewable Energy Certificates (RECs), but at a fixed price of $40 per megawatt hour of electricity produced. This should leave the vast bulk of the RET target (which remains at 45,000GWh by 2020) to be met by large scale renewables, which will continue to create RECs at a price fixed by the market. Essentially, the government is splitting the RET into the Small-scale Renewable Energy Scheme (SRES) and the Large-scale Renewable Energy Target (LRET).

The changes have been made in order to address an emerging problem with the previous, single RET scheme, where RECs generated by small-scale technologies were flooding the market and devaluing the REC price – impacting the viability of large-scale renewable energy projects.

The new LRET will cover large-scale renewable energy projects like wind farms and commercial solar, setting these apart from the small-scale renewable technologies used in households. Small-scale technologies, such as solar hot water systems, will be covered under the SRES, which will provide a fixed price of $40 per megawatt hour of electricity produced. The drop in the REC price had sparked concerns about the scheme’s ability to deliver the government’s target of sourcing 20 percent of Australia’s total energy mix from renewable sources by 2020.  Without a decent REC price, it will be difficult to encourage substantial investment in renewable technologies. Without this investment into already planned and future projects no new “green jobs” were being created or – in some cases – maintained.

According to the Australian Bureau of Statistics (ABS)’s quarterly report released in November, more than 1.2 million Australians are employed in the energy sector. Even though the ABS does not cover renewable energy jobs, the Renewable Energy Council says in its 2009 report that only 10,370 – not even 1 percent – are employed in the sector. Their forecast for 2020 predicts a doubling of these numbers under “business as usual.”

Modelling by the University of New South Wales’ Centre for Energy and Environment Markets shows that even with a technology breakthrough in the field of carbon capture and storage – which could be vast – it is in the renewable energy sector where jobs will grow steadily over the next four decade.

That said, the modelling assumes government policy that supports investment into the renewable energy space. The Renewable Energy Council and others have argued that the new LRET is a step in the right direction.

Only days after the announcement, power giant AGL and New Zealand’s Meridian Energy forged ahead with the $800 million Macarthur wind farm project. AGL made it clear the 365MW capacity project had been parked for the last year because of the decision to strip subsidised solar units from the scheme. Along with AGL, wind power companies Pacific Hydro and Roaring 40s have announced they are again thinking about investing billions of dollars in major wind projects. These projects will have flow on effects for local manufacturers, environmental engineering firms as well as construction companies which will create a number of jobs within these organisations.

It seems that maybe not a flood but a constant trickle of green jobs is on the way.