The RET’s effect on Tasmania

by Matt Grudnoff

The Renewable Energy Target (RET) has been subjected to a lot of criticism in recent years. Most of it has centred on the idea that the RET increases electricity prices. Numerous studies including the government’s recent review of the RET have shown that over time it is lowering electricity prices.

But the criticism has also come from some large industrial users of electricity hoping to get an exemption from the RET. Their claims have been subjected to for less scrutiny than claims that the RET is causing significant price pressures.

This paper looks at one group of large industrial firms in Tasmania and their claims that the RET is costing them $20 million. This claim is false. For it to be true large industrial users would have to be using one and half times more electricity than all of Tasmania. This is of course impossible.

RET assistance significantly offsets the pressure placed on industrial firms by the introduction of the RET. While rates vary annually, in 2014, Partial Exemption Certificates have covered 40 – 67 per cent of electricity costs for these businesses.

These firms have conveniently excluded this quite substantial assistance that they receive from the government. A conservative estimate of their RET liability has large industrial users in Tasmania paying less than $8.5 million.

The paper also shows that Tasmania gains large benefits from the RET. Focusing only on the Renewable Energy Certificates (RECs) that Tasmania creates the benefit is $125 million. This ignores investment benefits, jobs and lower wholesale electricity prices.

While advocating to government for a better deal for your industry is to be expected, these gross exaggerations do nothing to improve public debate and allow the proper evaluation of government policy.

Full report