Australian laws to promote up to $22 billion of renewable energy investment were postponed until August on Thursday, angering the industry and government, which is struggling to pass its climate change agenda. In a likely precursor to the outcome for the government's emissions trading scheme, parliament's opposition-dominated upper house Senate voted to delay the renewable energy laws until August, dashing government hopes of passing the laws next week.
The long-awaited legislation sets a 20 percent target for renewable energy by 2020 in Australia's coal-reliant electricity supply, and would unlock up to $22 billion worth of investment in solar and wind projects. "Clean energy companies around Australia will now put hiring plans on hold and in some cases be forced to start shedding staff," said Clean Energy Council Chief Executive Matthew Warren, adding the laws should have been passed a year ago.
Power companies closely watching the legislation include Origin Energy Ltd, AGL Energy, TRUenergy, owned by Hong Kong-based CLP Holdings and Pacific Hydro, owned by a group of Australian pension funds. The renewable energy laws set a statutory target of 9,500 gigawatt-hours (GWh) from renewable electricity sources in 2010, increasing to 45,000 GWh in 2020.
Renewable sources provide only 6.5 percent of Australia's current energy needs, with the rest generated from coal, oil and gas, making the country one of the worst per capita polluters. The delay puts at risk government rebates for people who install solar power at their homes. Climate Change Minister Penny Wong said payments would be backdated once the legislation passes.
The laws were introduced in parliament on Wednesday and had not yet been debated in the Senate, but Wong said the Senate had been given plenty of time to consider the package and the emissions trading scheme laws, which face near certain defeat next week.
"We are doing this because climate change is with us and because it will worsen in the lives of our children and those who come after them," Wong told reporters. "It is the responsible thing to do, and we will keep pressing forward with both these bills, with our renewable energy legislation and our carbon pollution reductions scheme, because it is the right thing to do."
But independent Senator Steve Fielding successfully moved that the laws be sent to a Senate inquiry, to report back by August 12, to examine the impact on big business. He was supported by fellow independent Nick Xenophon and the conservative opposition parties, who said the government had forced their hand by linking industry assistance to the separate emissions trading laws.
Greens Senator Christine Milne said the opposition and independents had bowed to pressure from major polluters and the aluminium industry, which said the renewable energy target would cost it more than A$100 million ($79 million) a year.
The government also faces a Senate roadblock next week over its plans to introduce an emissions trading scheme by July 2011, with the government seven votes short of the numbers it needs in the Senate to pass the laws. The emissions trading scheme and renewable energy target are the centre-left government's key strategies to curb greenhouse gas emissions, blamed for global warming, and fight climate change.
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