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Objective 2: Reducing emissions of greenhouse gases in the electricity sector

 

In 2014 the Renewable Energy Target was found to have achieved the objective of reducing greenhouse gases in the electricity sector:

  • the Expert Panel 2014 review of the Renewable Energy Target found it had 'delivered a modest level of emissions reductions', and
  • the Climate Change Authority 2014 review found the Renewable Energy Target 'was effective at reducing emissions'.

Expert Panel review

The Government's 2014 review of the Renewable Energy Target by the Expert Panel found that it 'has delivered a modest level of emissions reductions'.

To estimate the reduction in emissions out to 2030 as a result of the Renewable Energy Target, the Expert Panel drew on modelling analysis from ACIL Allen Consulting. The modelling compared annual carbon dioxide equivalent (CO2-e) emissions in the modelled electricity grids with the Renewable Energy Target as it is currently legislated, and if it was repealed from 1 January 2015. The report stated:

Repealing the RET is estimated to lead to an increase in annual emissions of about 24 Mt [million tonnes] CO2-e from 2020 to 2030. Cumulative emissions would increase by 58 Mt CO2-e over the period 2015 to 2020 and by 299 Mt CO2-e over the period 2015 to 2030.8

Climate Change Authority review

The Climate Change Authority's legislated review of the Renewable Energy Target in 2014 drew on its own 2012 review and the ACIL Allen modelling undertaken as part of the 2014 Expert Panel review. It found that the Renewable Energy Target:

...arrangements were envisaged to deliver 'at least 20 per cent' of Australia's electricity from renewable sources by 2020 and are projected to reduce Australia's emissions by 58 million tonnes of carbon dioxide equivalent (Mt CO2-e) over 2015–20, and by much larger amounts in later periods.9

It commented that the Renewable Energy Target arrangements:

...are not perfect but, in the Authority's view, they are effective in reducing emissions (at reasonable cost) in the centrally important electricity sector.10

Sinclair Knight Merz (SKM) estimated historical emissions reductions from 2001 to 2012 as a result of Renewable Energy Target, for the Clean Energy Council. SKM's report stated:

The uptake of renewable energy generation over the last 10 years has reduced emissions by approximately 23 Mt CO2-e [carbon dioxide equivalent]. The Renewable Energy Target itself is responsible for around 20 Mt CO2-e or approximately 90% of this estimated electricity market emission reduction.11

Australian Energy Regulator report

Falling demand for electricity is one of several factors impacting emissions in the electricity sector. In its report State of the Energy Market 2014, the Australian Energy Regulator observed that electricity demand continued to decline in 2013–14. One of the reasons cited was:

...the continued rise in rooftop solar photovoltaic (PV) generation, which reduces consumption of electricity sourced from the grid. In 2013–14 solar PV generation reduced grid consumption by 2.9 per cent. This growth has been driven by small scale renewable energy certificates and lower cost systems.12

Changing the electricity generation mix

The Renewable Energy Target increases the amount of renewable electricity in Australia's electricity generation mix. This means less generation from coal and other fossil fuel based electricity generators, thereby lowering overall emissions from Australia's electricity sector. To meet Australia's target of reducing greenhouse gas emissions by five per cent by 2020 (to below 1990 levels), an extra 58 million tonnes of emissions abatement from other sectors13 is needed from 2015 to 2020. Both the Government's 2014 review and the 2014 Climate Change Authority review forecast emission reductions of around 300 million tonnes owing to the Renewable Energy Target in the decade 2020 to 2030.

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