Wong hits switch for renewable energy

THE Rudd government has revamped its stalled renewable energy target scheme to head off job losses and a "strike" by investors.

THE Rudd government has revamped its stalled renewable energy target scheme to head off job losses and a "strike" by investors reluctant to put their money into renewable energy projects.

Changes announced yesterday could clear the way for billions of dollars of investment in large-scale clean energy ventures.

Climate Change Minister Penny Wong and her Assistant Minister Greg Combet announced that from January 1 , 2011, the scheme would be split into two parts -- the first paying a fixed price to small-scale sources such as home solar panels and the second covering large-scale projects such as wind farms, commercial solar and geothermal.

The renewable energy industry yesterday praised the change -- expected to lift electricity prices by about $4 a year -- saying it would halt job losses and pave the way for new investment.

The opposition and Greens claimed credit, with Coalition climate change spokesman Greg Hunt saying the government had adopted Tony Abbott's direct action approach and Greens senator Christine Milne saying the response mirrored her private member's bill introduced in the Senate on Thursday.

The RET seeks to ensure that 20 per cent of Australia's energy consumption by 2020 is derived from renewable sources. Generators of green energy earn renewable energy certificates, which they can sell to big energy consumers that are required to source 20 per cent of power from renewables.

The change, following months of consultations with industry, is designed to fix a flaw in the original policy which emerged when the Rudd government moved households into the RET scheme. This left the scheme with five times as many renewable energy certificates as it was designed to have, and drove down the value of renewable certificates.

Under the new policy small-scale sources operate in a separate scheme and will receive a fixed price of $40 per megawatt hour of electricity produced which will equate to a rebate of about $6200 for a 1.5 kw solar panel and $1200 for a typical solar hot-water system. Large-scale producers such as wind farms will operate in a separate market-traded environment. The industry expects this to increase the price of renewable energy certificates and make big projects viable.

Steve Garner, general manager of Keppel Prince, said the policy change had given his firm, which makes wind turbine towers and employs 120 people, a future. "We have really been suffering . . . we can now see that we do have a future," Mr Garner said.

Pacific Hydro general manager for Australia, Lane Crockett, said the announcement would unlock billions of dollars of projects across Australia and protect thousands of jobs.

AGL Energy managing director Michael Fraser, said AGL was likely to go ahead with renewable energy projects worth more than $1 billion.