Industry and Science Minister Ian McFarlane talks about the Renewable Energy Target and what it means for the future of the mining industry.
The Renewable Energy Target aims to ensure that 20 per cent of the country’s electricity comes from renewable sources by 2020. How are you planning on achieving this?
A recent bipartisan agreement achieved by the government means that the Renewable Energy Target (RET) will now deliver approximately 45,000 gigawatt hours (GWh) of additional electricity from renewable sources in 2020, increasing the share of renewable energy in Australia’s electricity supply to more than 23 per cent. Large scale generation will contribute 33,000 GWh of electricity to the target with the remainder coming from small scale generation, principally from solar photovoltaic (PV) systems.
Is the Renewable Energy Target on track?
The government’s Energy White Paper, which was released in April, sets out the government’s position on energy sources and technologies. Investment decisions, including choice of technology, are best made by industry, given its insights into market needs.
For this reason, the government will seek to maintain stable and predictable policy settings across the range of areas that affect such investment decisions, while taking a technology neutral approach. New large scale electricity generation capacity needed to meet the 2020 target will be a mix of technologies. Within this mix, large scale solar will become more prominent due to the falling cost of PV technology.
What will it mean for the mining industry?
The mining industry, along with other industries, will benefit from the government’s bipartisan agreement on the RET. The government has maintained the exemption from the RET for entities that generate and use their own electricity. In addition, the government is increasing the exemption for businesses conducting emissions-intensive, trade-exposed activities to 100 per cent, so that such businesses will no longer bear the cost of the RET.
The Solar Council has challenged the government to have 50 per cent renewable energy by 2030 – is this possible?
The government is considering Australia’s post-2020 greenhouse gas emissions reduction target to take to the United Nations Framework Convention on Climate Change (UNFCCC) Conference of Parties in Paris later this year. Australia’s post-2020 target will be consistent with continued strong economic growth and represent Australia’s fair share of the global effort to tackle climate change. Once Australia’s post-2020 target is set, the government will consider the mix of policies and measures needed to meet the target.
Moving on to the 2015 Budget – do you think the mining industry gained from the budget, despite FIFO workers missing out on the zone offset tax?
There were a number of benefits that came out of the budget for the mining sector. The Budget allocated $5 billion to a Northern Australian Infrastructure Facility to provide concessional finance for infrastructure projects in Northern Australia which will help enhance the resource investment environment by easing transport pressures on resource businesses.
The government is implementing the $225 million Industry Growth Centres Initiative which will lift the competitiveness and productivity of industry, including in the two centres specific to the resources sector: the oil, gas and energy resources sector growth centre; and the mining equipment, technology and services growth centre. The government has announced the Industry Innovation and Competitiveness Agenda to strengthen and grow the economy more broadly through a business friendly environment with less regulation and lower taxes and better economic infrastructure.
Prior to the Budget the government had already removed the mining tax and the carbon tax, established the Exploration Development Incentive to encourage exploration by junior companies in greenfields exploration projects, and saved industry more than $220 million last year as part of a commitment to cut red tape by more than $1 billion a year.
Submissions closed on a Queensland FIFO mental health state parliamentary inquiry around the same time GVK Hancock announced their Adani mega-mine will be 100 per cent FIFO – what are your thoughts on 100 per cent FIFO workforces?
The sourcing of a labour force for mine construction and operation is a matter for each mining company, providing they stay within Australian laws. The suitability of FIFO and other long distance commuting options will vary between different mines depending on a range of factors including the location of the mine and the size and nature of the workforce required.
The government has released its response to the House of Representatives Standing Committee on Regional Australia report Cancer of the bush or salvation for our cities? Fly-in, fly-out and drive-in, drive-out workforce practices in Regional Australia. Deputy Prime Minister Warren Truss has announced that the government’s response recognises that FIFO is both a legitimate practice most often used to address a lack of skilled employees in remote parts of Australia, and a practice that makes an impact on local communities.