Blast against energy scheme

GREEN GROUPS have slammed an inquiry into the Renewable Energy Target scheme, saying it was penned by climate sceptics whose recommendations could cripple Tasmania's economy.

The RET program was designed to generate 20 per cent of Australia's electricity supply from renewable sources by 2020.

A four-member panel led by businessman Dick Warburton presented their findings on the scheme to the federal government yesterday. 

The panel argued while the RET had met its objectives, it was an ''unjustifiably costly'' approach to reducing carbon emissions amid declining electricity demand.

Its authors advocated scaling back and shutting off access to the large-scale RET scheme (including projects such as wind farms), and scrapping the small-scale scheme (including household solar panels and water heaters) altogether.

Climate Councillor Tim Flannery said the ''biased and flawed'' review had already stymied investment in Australia's energy future.

Greens Senator Peter Whish-Wilson said the panel's recommendations would decimate Hydro Tasmania's profits.

Hydro generates about half Australia's renewable power, and has pumped several hundred million dollars worth of dividends into the state government's coffers from the RET scheme since it was established in 2001.

The company expects to generate several hundred million more should be the target extend to 2030 as planned.

Outgoing chairman David Crean this week warned if the scheme was scrapped, the effect on Hydro's bottom line would be ''severe''.

Senator Whish-Wilson warned any such move would completely deplete the ''rivers of gold''.

''Projects like the $2 billion King Island wind farm will be scrapped and other exciting growth opportunities will be stopped in their tracks,'' Senator Whish-Wilson said.

''Recently Hydro Tasmania cut 100 jobs due in part to the loss of the carbon price,'' he said.

''How many more will occur if we lose the RET?''

Treasurer Peter Gutwein acknowledged the uncertainty over the RET's future on Thursday, but his maiden state budget did not explicitly account for any blow to the state's finances from a reduction in the target.

Energy Minister Matthew Groom said yesterday the scheme must remain in tact.

''Tasmania's existing investments in both hydro and wind generation must be protected and we will continue to lobby strongly for that to happen,'' Mr Groom said.

''The Commonwealth Government should maintain a framework which allows us to make the best use of our renewable generation assets.''

Bass Liberal HMR said renewable energy would continue to have an ''important long-term future'' in Australia, but needed to be balanced against the impact on electricity prices.

The federal government's decision on the future of the RET program is expected in coming weeks.

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