RET deal getting closer

Agreement on the controversial renewable energy target (RET) is becoming more likely as the Government and the clean energy sector continue talks.

According to Fairfax, environment minister Greg Hunt believes that the impasse which has stalled investment in the sector could soon end.

According to a report by the Climate Council released in November last year, new investment into renewable energy projects had dropped by 70 per cent.

"I would regard this as the most significant discussion yet with the industry," Hunt told Fairfax on Wednesday.

"The potential exists for a breakthrough. I don't want to overstate it, but we've had our most constructive discussions."

The impasse surrounds the size of the RET. At present, the aim is to ensure 41,000 gigawatt hours of energy comes from renewable energy sources by 2020. The figure of 41,000 was originally intended to represent 20 per cent of Australia’s energy usage.

However the Government wants to reduce the target to 26,000 GWh, on the grounds that, because of declining energy usage, that figure represents a ‘true 20 per cent’.

Earlier this week, the Opposition rejected a compromise of 31,000 GWh. According to the Australian, Labor would accept a figure in the “mid to high 30,000s’’.

The Clean Energy Council has also been involved in talks with Labor and the government. One source told the Australian that a compromise figure of about 33,500 GWh could be possible.

Any compromise would also have to address the high number of renewable energy certificates in the market. These certificates are purchased by companies liable under the RET. The proceeds from them are used in renewable energy projects.