How does it affect your power bill?
The Renewable Energy Target is a policy implemented by the Howard Government in 2001 to generate interest in and production of renewable energy in Australia and to aim at 20 per cent of power to be drawn from renewable such as wind and solar by 2020.
The RET Scheme is helping to transform our electricity generation mix to cleaner and more diverse sources such as wind and solar plus supporting growth and employment in the renewable energy sector.
The current Abbott government has announced a review of the RET to determine whether the RET is pushing electricity prices up.
There are two main groups who currently product energy. Large scale producers which include wind, hydroelectric and solar power plants and small scale producers like households with solar power systems.
For Australia to meet it’s RET target investment in large scale production is required. However, building renewable power plants is expensive, the RET provides an incentive for companies to invest.
According to the Clean Energy Regulator (the federal government body that oversees the RET) investment at the end of 2011 totaled around $10.5 billion in renewable energy power stations.
It also stated that there were more than 1.3million installations of energy efficient installations including solar panels and solar hot water systems between 2001 and 2011
Energy retails are required by law to purchase renewable energy certificates generated by renewable energy producers. The number of certificates the retailer needs to purchase is determined annually by the Clean Energy Regulator.
Energy retailers pass the cost of the RET on to consumers through retail pricing and estimated costs to consumers is between 1 and 5 percent of power bills. In Queensland, the regulator estimates that the cost of the RET to an average yearly household bill in 2013-14 is at least $55.24.
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