Industry comments on CPRS

“While the emissions trading scheme (ETS) puts a price on emissions, the Renewable Energy Target (RET) undermines that market mechanism, discouraging coal-fired generators from switching to natural gas – the most efficient way of reducing Australia’s emissions,” said APIA chief executive Cheryl Cartwright.

The Government’s planned RET will mandate the use of renewable energy for 20 per cent of power generation by 2020.

“This will be such an expensive investment for power generators, and it means that, for the remaining 80 per cent of power generation, these companies will need to reduce costs,” Ms Cartwright said.

“In order to reduce those costs, the power generation companies are likely to maintain their coal-fired plants, delaying their investment in natural gas fired electricity generation.”

Ms Cartwright said that a CPRS that does not include a RET will still see renewable energy become part of the energy mix, but would also encourage generators to switch to natural gas instead of coal-fired power.

She says that natural gas is the obvious next step towards reducing carbon emissions. It creates less than half the emissions of coal-fired power generation and the technology is immediately available and less expensive than renewables.

Ms Cartwright concluded “By forcing the use of renewable energy, no matter how uneconomic, through the RET, the Government is approaching the task of reducing emissions in the most costly manner possible.”

In addition, Northern Territory Country Liberals Senator Nigel Scullion has said that the ETS could see Inpex relocate its Ichthys LNG Development offshore in order to ensure a more cost effective project.

During an interview with ABC radio Mr Scullion said that he had spoken with the managing director of Inpex about the ETS. “He said to me that with the existing arrangements they most likely wouldn’t be coming to Darwin, and most likely (not coming to) Australia.”

Mr Scullion said “The ETS is the single thing that is going to put an arrow in the heart of an $A24 billion investment in Darwin. The future for Darwin, everybody recognises, is with this big project and it has at best a very uncertain future.”

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