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Solar thermal magazine Who will profit if Australia Scraps Renewable Energy Target

 If Australia Scraps Renewable Energy Target – Power generators to gain AUD 70bn in extra revenue if renewable target is cut, BNEF analysis shows

Sydney, 26 May 2014 – Scrapping or reducing Australia’s Renewable Energy Target would shelve AUD 12-21bn of investment in clean energy, cut 7,000-11,000 future jobs in wind and solar industries every year, lead to higher power prices for consumers and deliver power companies AUD 6-12bn of extra revenue from 2015 to 2020, according to new analysis from research firm Bloomberg New Energy Finance.

The White Paper produced by BNEF’s Sydney analysis team shows that the current Renewable Energy Target – which is being reviewed by the federal government – is expected to drive AUD 35bn of investment in clean energy by 2020, employ 25,000 workers each year in construction and operations, reduce emissions from power generation by 5% and prevent future surges in power prices by supplying electricity for 20-25 years with no ongoing fuel costs. It will however oversupply the electricity market and could place pressure on the profitability of existing electricity generators.

By comparison, the study finds that reducing the target in line with some power company proposals will lead to AUD 12bn less investment, 6,600 fewer clean energy jobs each year, 3% higher carbon emissions and power prices that are AUD 16 per year (1%) higher in the year 2020 for the average household. That will increase to an extra AUD 68 (3%) per year in 2030, because there will be less renewable power capacity helping to push wholesale electricity prices down with their low-running costs.

Cutting the target altogether leads to greater impacts, with AUD 21bn less investment, 11,100 fewer clean energy jobs each year, 5% higher carbon emissions and power bills that are at least AUD 44 (2%) more in the year 2020 for consumers. By 2030, the average household can expect to pay at least AUD 142 (6%) more on their annual power bill than if the renewable target were kept in place, because the costs of generating electricity are forecast to surge without low-running cost renewables.

“Cutting or reducing the Renewable Energy Target is likely to result in less competition among fossil-fuel power generators and strong future increases in the price of electricity,”, said Kobad Bhavnagri, Bloomberg New Energy Finance’s head of Australia.

“This helps to explain why many of Australia’s largest power companies are now pushing for a reduction in the target,” he said.

The analysis shows that scrapping or reducing the renewable target would strongly benefit power companies rather than consumers. Although costs to the average household would fall by AUD 10 per year for the first four years if the target is cut, prices would surge after that due to less supply and competition in the power markets. Existing electricity generators would then receive an extra AUD 11.5bn in revenue between 2015 and 2020 if the target were scrapped, and a massive AUD 70.2bn between 2015 and 2030, the study finds. If the target is reduced, existing generators would receive an extra AUD 6.1bn between 2015 and 2020, and AUD 40.3bn between 2015-30. The majority of this extra revenue will flow to coal-fired power stations, which dominate Australia’s current power mix.

The study finds that the Renewable Energy Target will cost the average household around AUD 9-14 each year from 2015-19, but then actually reduce bills from 2019 onwards, compared to if the policy was scrapped. In 2020, it will save the average household AUD 44 a year, increasing to AUD 142 in the year 2030. “This is because renewables like wind and solar – which have no fuel costs – push down the price of producing power from coal and gas on the wholesale markets. In only four years, this more than offsets the cost of building the new wind and solar power stations under the Renewable Energy Target,” Bhavnagri said.

“For an accurate assessment you have to look at both sides of the equation – what do the assets cost to build, but then how much money do they save. Governments and power companies that stand to profit handsomely from abolition of the scheme have so far only talked about the costs. But that’s like only talking about the costs of buying a new house and forgetting that you don’t have to pay rent anymore,” he added.

The White Paper is available here.


Bloomberg New Energy Finance (BNEF) provides unique analysis, tools and data for decision makers driving change in the energy system. With unrivalled depth and breadth, we help clients stay on top of developments across the energy spectrum from our comprehensive web-based platform. BNEF has 200 staff based in London, New York, Beijing, Cape Town, Hong Kong, Munich, New Delhi, San Francisco, São Paulo, Singapore, Sydney, Tokyo, Washington D.C., and Zurich.

BNEF products fit your daily workflow, streamline your research, sharpen your strategy and keep you informed. BNEF’s sectoral products provide financial, economic and policy analysis, as well as news and the world’s most comprehensive database of assets, investments, companies and equipment in the clean energy space. BNEF’s regional products provide a comprehensive view on the transformation of the energy system by region.

New Energy Finance Limited was acquired by Bloomberg L.P. in December 2009, and its services and products are now owned and distributed by Bloomberg Finance L.P., except that Bloomberg L.P. and its subsidiaries (BLP) distribute these products in Argentina, Bermuda, China, India, Japan, and Korea. For more information on Bloomberg New Energy Finance visit, or contact us at [email protected] for more information on our services.


Bloomberg, the global business and financial information and news leader, gives influential decision makers a critical edge by connecting them to a dynamic network of information, people and ideas. The company’s strength – delivering data, news and analytics through innovative technology, quickly and accurately – is at the core of the Bloomberg Professional service, which provides real time financial information to more than 320,000 subscribers globally. Bloomberg’s enterprise solutions build on the company’s core strength, leveraging technology to allow customers to access, integrate, distribute and manage data and information across organizations more efficiently and effectively. Through Bloomberg Government, Bloomberg New Energy Finance and Bloomberg BNA, the company provides data, news and analytics to decision makers in industries beyond finance. And Bloomberg News, delivered through the Bloomberg Professional service, television, radio, mobile, the Internet and three magazines, Bloomberg Businessweek, Bloomberg Markets and Bloomberg Pursuits, covers the world with more than 2,400 news and multimedia professionals at more than 150 bureaus in 73 countries. Headquartered in New York, Bloomberg employs more than 15,500 people in 192 locations around the world. For more information visit

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