The NSW Government will soon be introducing legislation to create a mandatory renewable energy target (called "NRET"). This is a very good outcome following years of campaigning by the Greens and environmental groups fed up with the intransigence of the federal government over the federal scheme. The Greens will be supporting the legislation in parliament. However, we have a number of serious concerns:

• the target is too small
• the scheme will not drive investment in NSW
• the scheme will not help the environment as much as it should
• the scheme allows sawdust and sawmill waste from native forests to be an eligible source of renewable energy
• energy-intensive industries have been given a 'pass'

These concerns are detailed below.

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Detailed concerns about the proposed legislation

The target is too small

The NRET legislation has a target of 10% renewable energy by 2010, and 15% by 2020 (from a baseline of 6.1%). This is not nearly high enough - indeed, greenhouse gas emissions form the energy sector will still increase during the life of this scheme. The Greens are calling for a target of 15% by 2012 and 25% by 2020, a target that will truly foster the renewable energy sector and especially local manufacturing, meaning more investment and jobs in a sustainable energy future.

The Greens will be moving an amendment to increase the target to 15% by 2012 and 25% by 2020.

The scheme will not drive investment in NSW

The other key weakness of the legislation is that it allows generation from other states to be eligible if it is consumed in NSW. This is a disaster, with significant economic and environmental implications. Because projects in other states are further advanced (thanks to earlier site surveying or, in Victoria's case, earlier government support), the effect of this will be to see almost all the generation happen outside NSW. As a result, up to $7.5 billion in investment, 1000 construction and 400 permanent maintenance jobs which could come to NSW, will go to other states.

There are currently plans and development applications for wind projects worth about 4000MW in NSW, more than enough to meet the NSW target. However, industry figures have confirmed that these projects need RECs to make them economically viable. As the scheme stands, none of these will proceed to construction for at least 3-4 years. The Government claims “NSW is not a high wind state”, but a number of large companies have indicated this is not true. The industry is certain enough about the wind resource to invest billions of dollars of their own money. Government advice appears to be based on a 2001 ‘wind census’ that missed the high-value Silverton site recently identified by Epuron (the Minister refuses to release or detail the advice he has on this matter).

We do not understand, and we do not think the people of NSW will understand, why the NSW government is so opposed to investment and job creation in this state.

The Greens will be moving an amendment to ensure only generators based in NSW are eligible for the scheme.

The scheme will not help the environment as much as it should

Because many of those projects have already begun construction or have been recently completed, the first projects to qualify for renewable energy certificates (RECs) would all have happened anyway - they were begun well before the legislation will be passed (or even was announced), and were not inspired by the scheme at all. This means that the scheme will not create any additional renewable energy for at least 4 years!

In addition, projects in SA and Tasmania, which do not have mandatory schemes and thus no tradeable certificates, will end up being counted twice - once in their home state under their 'aspirational targets', and again under the NRET scheme. This will have the effect of misleading the public into thinking more is being done to help renewable energy, and thus combat dangerous climate change, that will actually be the case.

The scheme allows sawdust and sawmill waste from native forests to be an eligible source of renewable energy

The Greens have serious concerns that Section 23(2)(c) of the Bill will permit the burning of native forest wood under the guise of ‘sawdust or other sawmill waste’ should the Bill become law in its current form. Alternatively it could become a crutch for the woodchip industry if sales decline.

The forestry industry quotes a number of studies that purport to show that bioenergy from “wood waste” reduces greenhouse gas emissions rely on a single assumption that no additional trees will be cut for bio-energy fuel. This assumption does not hold and is contradicted by the logging industry’s own statements. Most woodchips and therefore most of the wood taken from Australian native forest is classified as “residue” (State of the Forests Australia 2003.) The logging industry in Tasmania has admitted that this ‘so called’ residue actually drives native forest logging in that State.

The Greens will be moving an amendment to remove sawdust, sawmill waste and other wood wastes from the list of eligible sources.

Energy-intensive industries have been given a 'pass'

Trade-exposed, energy-intensive industries are exempt from paying for the slight cost increase that will flow from this scheme.

The exemption simply serves to have ordinary NSW households subsidising the already huge profits of companies like BHP Biliton. The exemption is part of a larger trend by both Labor and Coalition governments to exempt these industries from efforts to tackle climate change. If they are not included, they will be given no price signal or other incentive to reduce their energy intensity and will remain a large part of the problem. The whole point of a 'price signal' and market-based approaches to combating climate change is to discourage energy-intensive industries and support lower-energy alternatives. Exempting some industries destroys the viability of market-based schemes. A number of alternative mechanisms exist for making such industries competitive in the short-term, while negotiating internationally on greenhouse gas emission reductions.

The Greens will be moving an amendment to remove exemptions for trade-exposed, energy-intensive industries.

Take Action!

Contact the Minister for Energy, Ian Macdonald (02 9228 3304 or by email), and ask him to amend the NRET legislation so it achieves its full potential.

If you live in rural or regional NSW, also contact your local MP and remind them of the investment and jobs in drought-affected regional economies that could be achieved if the eligible generators are restricted to NSW.

Minor parties will play a crucial role in passing amendments, especially on the question of NSW-based generation. At the moment they are supportive of our amendment but they will need constant encouragement! Contact Robert Brown from the Shooters Party (02 9230 3059 or by email) and Fred Nile from the Christian Democrats (02 9230 2098 or by email) and remind them about the economic and environmental benefits of limiting eligible generation to NSW.