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\begin{document}

\title{Renewable Energy in Australia: Policy, Regulation, and Institutions}



\author[1]{Muyi Yang}%
\author[2]{Suwin Sandu}%
\author[2]{Wenbo Li}%
\affil[1]{Centre for Energy Policy, University of Technology Sydney}%
\affil[2]{Affiliation not available}%


\vspace{-1em}



  
  \date{May 21, 2024}


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\selectlanguage{english}
\begin{abstract}
This paper assesses the policy, regulatory and institutional settings
for renewable energy in Australia. This assessment is premised on the
following arguments: a) the extent to which renewable energy is likely
to contribute to electricity defossilisation will be largely determined
by the efficacy of the policy, regulatory and institutional settings;
and b) most of the existing discussion on renewable energy is neglectful
of the significance of these settings. The assessment suggests that the
overall policy, regulatory and institutional settings for renewable
energy in Australia are characterised by a lack of political
constituency for redressing climate change challenge, thereby piecemeal
policy for promoting renewable generation, significant regulatory
uncertainty, and limited institutional capacity. The assessment also
suggests that this lack of political constituency is primarily a
reflection of the broader electricity and socio-economic policy
settings, which have historically favoured cheap and abundant indigenous
coal for power generation, to serve wider socio-economic priorities and
agendas. In such environments, issues of climate change have assumed a
dormant role. Hence -- inefficacious policy, regulation and institutions
for promoting renewable generation.%
\end{abstract}%



\sloppy


\section*{Renewable Energy in Australia: Policy, Regulation, and
Institutions}

{\label{renewable-energy-in-australia-policy-regulation-and-institutions}}

\textbf{Abstract:}This paper assesses the policy, regulatory and
institutional settings for renewable energy in Australia. This
assessment is premised on the following arguments: a) the extent to
which renewable energy is likely to contribute to electricity
defossilisation will be largely determined by the efficacy of the
policy, regulatory and institutional settings; and b) most of the
existing discussion on renewable energy is neglectful of the
significance of these settings. The assessment suggests that the overall
policy, regulatory and institutional settings for renewable energy in
Australia are characterised by a lack of political constituency for
redressing climate change challenge, thereby piecemeal policy for
promoting renewable generation, significant regulatory uncertainty, and
limited institutional capacity. The assessment also suggests that this
lack of political constituency is primarily a reflection of the broader
electricity and socio-economic policy settings, which have historically
favoured cheap and abundant indigenous coal for power generation, to
serve wider socio-economic priorities and agendas. In such environments,
issues of climate change have assumed a dormant role. Hence --
inefficacious policy, regulation and institutions for promoting
renewable generation.

\textbf{Keywords:} Renewable energy; Policy; Regulation; Institutions;
Australia

\section*{Introduction}

{\label{introduction}}

It is now widely accepted that climate change is one of the most
pressing challenges facing humanity, due to its detrimental impact on
human and natural systems (IPCC, 2007). The climate change challenge is
an outcome of increase in global temperature (global warming) caused by
anthropogenic greenhouse gas (GHG) emissions. The use of fossil fuels
for electricity generation is the single largest source of these
emissions, responsible for almost one-fourth of global emissions (IPCC,
2014). In the absence of any significant transformation in the
electricity generation technology-mix, it is expected that global
emission levels will increase by at least 35 per cent, by 2040 (compared
with 2015 levels), which would potentially intensify the climate change
challenge (IEA, 2017).

Recent years saw growing efforts to search for options to defossilise
electricity generation, especially in Australia (the focus of this
paper), which is considered as one of the worst emitters in the world in
terms of emissions per capita (The Climate Council, 2015). Among various
options under consideration, a consensus seems to have reached that
renewable energy (such as, wind and solar) is an attractive option. The
attractiveness of renewable energy becomes even greater if one takes
notes of the growing uncertainty about the viability and acceptability
of alternative options for electricity defossilisation, particularly
nuclear energy and carbon capture and storage (CCS).

Considerable work has already been undertaken to discuss the role of
renewable energy in electricity defossilisation. This discussion has
primarily been confined to the techno-economic aspects of renewable
energy, focusing on its technical potentials (Dawson and Schlyter, 2012;
Shafiullah et al., 2012; Yusaf et al., 2011), cost-effectiveness (ATSE,
2009; Kann, 2009; Lu et al., 2017; Trainer, 2017), externalities (such
as, multiplier effects) (SKM, 2012, 2013; The Climate Institute, 2011),
and risks (for example, merit-order effects) (Diesendorf, 2007; Needham,
2008; Prasad et al., 2017). There is rather scant discussion of the
policy, regulatory and institutional aspects of renewable energy. This
paper argues that these non-techno-economic aspects are equally
important, because they will largely determine the extent to which
renewable energy is likely to contribute to electricity defossilisation.
Insights into these aspects are therefore pre-requisites for developing
a more concerted discussion on the role of renewable energy in the
Australian electricity landscape.

Against the above backdrop, the primary objective of this paper is to
assess the policy, regulatory, and institutional settings for renewable
energy in Australia. Policy setting, in the context of this paper,
refers to the political processes for making policies to promote
renewable energy. Regulatory setting focuses on the prevailing
legislations for regulating various facets of renewable energy, such as,
planning, financing, implementation and operation. Institutional setting
is about the responsibilities of various institutions involved in making
and implementing renewable energy policies and regulations. Further,
this paper assesses the policy, regulatory, and institutional settings
in the broader electricity and socio-economic policy settings. This
assessment is made based on the argument that generation technology-mix
is shaped by the underlying electricity policy setting, which in turn
draws its imprimatur from the wider policy setting for socio-economic
development of the nation. Hence, the policy, regulatory and
institutional settings for promoting renewable generation are
inextricably intertwined with the broader electricity and socio-economic
policy settings.

The assessment in the paper is empirical in nature. Such an assessment
-- this paper contends -- is extremely useful, especially for
policy-makers and energy planners. Its usefulness arises from its
ability to demonstrate the significance of policy, regulatory, and
institutional aspects of renewable energy, and how appreciation of these
aspects is critical for providing context and meaning to the
techno-economic discussion of renewable energy. The insights of the
assessment are not only relevant for Australia, but also for other
countries currently considering renewable energy as an option for
defossilising electricity generation.

This paper is organised as follows. Section 2 provides a brief narrative
on the electricity and socio-economic policy settings for Australia --
essential for appreciating various arguments presented in this paper.
Section 3 provides an overview of the policy, regulatory and
institutional settings for renewable energy in Australia. The efficacy
of these settings is also discussed in the section. Section 4 presents
some broad conclusions of the paper.

\section*{Electricity and socio-economic policy
settings}

{\label{electricity-and-socio-economic-policy-settings}}

This section of the paper provides a brief overview of the electricity
and socio-economic policy settings for Australia, with the aim of
developing a contextual backdrop for assessing the policy, regulatory
and institutional settings for renewable energy in Australia. This
overview is carried out for three-time periods, to coincide with major
changes in these policy settings. These time periods are: early years of
the electricity industry (1880s and 1890s), era of state interventionism
(1900s to 1970s), and market reform period (1980s to the present).
Assessment of broader policy settings in these three-time periods --
this paper argues -- will provide insights into the underlying
influences that have shaped these settings, and how these settings have
shaped the policy, regulation and institutions for promoting renewable
generation.

\textbf{1880s and 1890s} : In the years following the emergence of
electricity industry in Australia, the policy setting of the industry
mainly emphasised furtherance of business interests, through recourse
to\emph{laissez faire} precepts, namely, private ownership as the best
way to promote economic and social progress (Wilkenfled and Spearritt,
2004). This emphasis was consistent with the socio-economic policy
settings of the time that prioritised the creation of a socio-economic
order in which investors (especially, British) were given freedom to
pursue their self-interest with British colonial government assuming a
supportive role (Butlin, 1959). This priority essentially reflected
British interests, for example, developing the continent as sources of
raw materials (Attard, 2008), and as outlets for surplus capital and
labour (Steven, 2000; Trainor, 1994). It also received substantial
support from domestic capitalists whose existence and prosperity were
closely linked to accelerated urbanisation and trade fuelled by British
capital and technology (Gilchrist, 2017). Guided by the private-oriented
policy setting of the electricity industry, private investment was drawn
to the industry; most of this investment was made in coal-based power
projects, due to the abundance of domestic coal resources and the
existence of well-established coal mining industry (Saddler, 1981).

1900s to 1970s: Prompted by concerns about Australia's economic
vulnerabilities to external threat (such as, significant fluctuations in
international demand and prices for primary commodities) and growing
public appeal of Keynesianism, the policy priorities for socio-economic
development began to shift in the early 20\textsuperscript{th} century
towards state interventionism, protection of the infant industry, and
creation of a welfare society (Bell, 1997). These priorities were
essentially reflective of a consensus between the labour and the
business, known as the Australian Settlement (Kelly, 1992). The essence
of this consensus was that protectionism could promote domestic
industry, and create employment opportunities for urban professionals
and factory workers (Castles, 1988). In order to subserve these
priorities, state electricity authorities were created, and made
responsible for managing power systems within the state territories
(Sharma, 2003). The electricity authorities were deliberately encouraged
to procure cheap and reliable indigenous fuels (especially, coal) for
power generation -- essential for promoting industrial growth and social
welfare improvement (Rosenthal and Russ, 1988).

\textbf{1980s to the present:} Australia embraced economy-wide
neoliberal reforms in the 1980s, indicating a fundamental shift in the
policy priorities for socio-economic development towards market
competition, private investment and deregulation (Quiggin, 2002). This
shift was assisted by several developments that undermined the public
appeal of Keynesianism. These developments included: the end of post-war
economic boom and the onset of economic recession; the need to revive
economic growth in new economic circumstances typified, for example, by
stagflation and increasing economic globalisation; a view that revival
of economic growth in these circumstances can only be achieved by
improving international competitiveness of the national economy; an
argument that improving international competitiveness requires
improvement in domestic competitiveness first; a strong belief that
domestic competitiveness is best measured in terms of economic
efficiency; and a faith that this efficiency can be best improved
through recourse to free market principles (Argy, 2002; Bell, 1997). The
neoliberal reforms also received substantial support from
internationally competitive, export-oriented industries (especially,
resource industries), whose interests were well served by market
liberalisation and de-regulation (Bernard, 1994).

Electricity reforms have been implemented in Australia as integral
extensions of the economy-wide reform programs. These reforms led to
significant changes in the Australian electricity industry, for example,
vertical and horizontal unbundling of existing vertical-integrated
electricity authorities, creation of competitive markets for electricity
trading (\emph{i.e.,} National Electricity Market, NEM), establishment
of sector-specific regulators (\emph{i.e.,} Australian Energy Regulator,
AER), and privatisation (Moran, 2006). These changes have encouraged
electricity companies to use cheap indigenous fuels (especially, coal
and gas) for power generation, and to rehabilitate some old
less-efficient coal power plants, with the view to minimise short-run
marginal costs of electricity (MacGill and Healy, 2013; Sharma, 2003).
Even in the recent years, the growing pressure for the Australian
government to act on climate change has not led to a fundamental shift
in the generation technology-mix, which continues to be dominated by
coal-based capacities (IEA, 2018).

Based on the above discussion, some points are identified that will need
to be considered in the assessment of the policy, regulatory and
institutional settings for renewable energy in Australia. These points
are as follows:

The electricity policy setting in Australia has, over three distinctive
time periods (namely, classical, Keynesian, and neoliberal), focused on
cheap and reliable fuels for power generation. This focus has tended to
favour coal-based technologies, resulting in the formation of a
coal-electricity compact. This compact trace its origin to the late
19\textsuperscript{th} century, when private investment was drawn to the
industry, as a response to the technological advancements in electricity
and the business opportunities it offered. Most of this investment was
made in coal-based power projects, due to the abundance of indigenous
coal reserves and the existence of well-established coal mining
industry. The coal-electricity compact was consolidated in the era of
state interventionism (1900s to 1970s), as state electricity authorities
were deliberately encouraged to procure indigenous fuels (especially,
coal) for power generation to promote supply reliability. The
coal-electricity compact was further strengthened after market reforms,
as these reforms tended to encourage cost-minimisation and profit
maximisation behaviours of electricity companies. These obviously
favoured generation technologies using cheap indigenous fuels,
especially coal.

The underlying electricity policy setting in each time period has
predominantly reflected the wider socio-economic policy setting and
associated interests. This implies that the coal-electricity compact is
likely to remain dominant in Australia in the years to come, especially
in the absence of a national consensus of developing a low-carbon
economy. This is so because the coal-electricity compact is essentially
reflective of the electricity policy setting, which derives its
legitimacy from the underlying policy setting for socio-economic
development of the country. Change in the coal-electricity compact
(through, for example, promoting renewable generation) will lead to
socio-economic and political consequences, which may in turn cause
public concerns, and hence reservation, about further policy support for
renewable energy. The recent announcement made by the Victorian
government to extend the licenses of two large coal-based power stations
in the Latrobe Valley for 17 years may lend some credence to this
viewpoint.

\section*{Renewable energy: Policy, regulation, and
institutions}

{\label{renewable-energy-policy-regulation-and-institutions}}

This section provides a description of the key policy, regulatory, and
institutional settings of renewable energy in Australia, with the view
to assess the efficacy of these settings.

\textbf{Policy}

The review of policy setting for renewable energy in Australia is
divided in this section into four time-periods, according to the
changing position taken by the Australian government towards climate
change policy in general, and renewable energy policy in particular.
These time periods are:

\textbf{1980-1996:} The debate of climate change in Australia traces
back to the 1980s. For example, in 1980, a conference was held by the
Australian Academy of Science to discuss 20 years of measurements that
show an increase in the levels of GHG emissions (Burgmann and Baer,
2012). Later, the Commonwealth Scientific and Industrial Research
Organisation (CSIRO) held two conferences (in 1987 and 1988), focusing
on the biological and social impacts of climate change. These two
conferences attracted considerable public attention (Staples, 2009).
Besides, Australian scientists also played active role in the
international conference on climate change held in Toronto in 1988,
which called for a 20 per cent reduction of global emissions from
current levels by 2005, known as the Toronto target (Staples, 2009).

The early debate of climate change in Australia had raised extensive
public concerns about dangerous effects of GHG emissions, yet political
will to act was limited. For example, in 1989, a proposal was made by
the Environment Minister to adopt an Interim Planning Target of reducing
emissions to 20 per cent below 1988 levels by 2005. The proposal was
however rejected due to strong opposition from ministers with economic
and resource portfolios. It was later accepted with the proviso that
measures for achieving the interim target would not be introduced at the
expense of the economy -- the so called no-regrets measures (Burgmann
and Baer, 2012).

In 1992, the Council of Australian Government (COAG) endorsed the
National Greenhouse Response Strategy (NGRS), which called for the
pursuit of no-regrets measures that `meet equity objectives by causing
minimal disruption to the wider community, and single industry sector,
or any geographical region' (National Greenhouse Advisory Panel, 1996,
pp 12-13). Accordingly, measures recommended by the NGRS mainly focused
on voluntary actions for emissions reduction. In the context of
electricity industry, market reforms were recommended based on the
argument that these reforms could establish the primacy of pricing
mechanism in the industry, which could foster competition, and hence
provide appropriate signals for attracting new investment, especially in
renewable energy and co-generation (Commonwealth of Australia, 1997).

The emerging evidence however suggests that the NGRS had failed to meet
the interim target (Wilkenfeld et al., 1995). For example, in the
electricity industry, market reforms had failed to encourage generators
to take voluntary actions (\emph{e.g.,} investment in renewable
generation) for reducing their emissions. Rather, the market reforms had
tended to encourage them to use low-quality high-GHG-emitting coal for
power generation, and to rehabilitate some old less-efficient coal power
plants, with the view to minimise short-run marginal costs of
electricity (Sharma, 2003). According to Findlay (2000),
`\ldots{}introduction of electricity markets has increased Greenhouse
gas emissions by 6 million tonnes of CO\textsubscript{2} equivalents per
year above the predictions, yet the restructuring of the electricity
industry was the centrepiece of the 1992 National Greenhouse Response
Strategy!'.

\textbf{1997-2006:} In response to the failure of the NGRS and growing
public pressure for Australian government to act on climate change, the
federal Coalition government announced in 1997 a \$180 million, 5-year
package of measures -- \emph{Safeguarding the Future: Australia's
Response to Climate Change} -- that constituted the National Greenhouse
Strategy (NGS). The NGS was targeted to deliver a `reduction of a third
in our expected net emissions growth from 1990-2010\ldots{}from 28 to 18
per cent in that period' (Commonwealth of Australia, 2000). There was
one measure in the NGS specifically identified as going beyond
no-regrets measures -- the Mandatory Renewable Energy Target (MRET). The
MRET provided financial incentives to renewable generators in the form
of tradeable certificates (Renewable Energy Certificates, RECs). The
RECs were created for every megawatt hour of electricity renewable
generators produce. Electricity retailers were obligated to purchase the
RECs to meet their annual renewable energy obligations. The obligations
were to have 2\% of electricity sales from renewable sources by 2010,
equivalent to 9,500 GWh of electricity generation in that year (Moran
and Sood, 2013).

Despite some progress in promoting renewable generation, overall the NGS
was seen by many commentators as insufficient because it mainly
reinstated the previously cancelled measures (Taplin and Yu, 2000). This
view was also supported by some speculation that the NGS was largely
introduced as an attempt to convince the international community that
Australia should be given special consideration in the Kyoto
negotiations, as the country has already made significant efforts to
reduce its emissions (Hamilton, 2000; Taplin and Yu, 2000). This
speculation may get substantiated by the strong position taken by the
Australian government during the Kyoto negotiations, particularly the
threat to withdraw from the negotiations, and refusal to ratify the
Protocol, even with the inclusion of the controversial land-clearing
clause (\emph{i.e.,} the Australia Clause).

In contrast to the federal government, Australian state governments
appeared to have taken more active actions for emissions reduction. For
example, the New South Wales government introduced the Greenhouse Gas
Reduction Scheme (GGAS) in 2003. It was one of the world's first
mandatory emissions trading scheme for the power sector. This scheme had
provided significant support for renewable generation, leading to
emissions reduction of 90 million tonnes (Burgmann and Baer, 2012).
Besides, feed-in tariffs (FiTs) were also provided in various states,
mainly focusing on the promotion of residential rooftop solar PVs
(Nielson, 2010). In addition, in 2004, a working groups was established
by the First Ministers of all Australian State and Territory governments
to discuss the development of a national emissions trading scheme (ETS)
(Warren et al., 2016).

\textbf{2007-2012:} Australia's environmental stance had drastically
changed after the 2007 federal election. Immediately after the election,
the Labour government ratified the Kyoto Protocol with unconditional
emissions reduction target of 5 per cent below 2000 levels by 2020, and
conditional target of 15-25\% subject to international commitment
(Cheung and Davies, 2017). In 2010, the Labour government also expanded
the MRET to 45,000 GWh by 2020 (equivalent to 20\% of electricity sales
in that year) (MacGill and Healy, 2013). In the following year, the MRET
was further separated into two components. They are: 1) the Small-scale
Renewable Energy Scheme (SRES) that covers small-scale renewable
installations (for example, rooftop solar PVs, and solar water heaters);
and 2) the Large-scale Renewable Energy Scheme (LRET) that covers
utility-scale renewable power stations (such as, wind farms, and solar
PVs). This separation was made due to concerns about excessive supply of
RECs created by a large number of small-scale installations (for
example, rooftop PVs) fuelled by state-based FiTs and its crippling
impacts on REC prices (Nielson, 2010).

In addition, the Labour government had also made some attempts to
introduce a national carbon pricing scheme -- the Carbon Pollution
Reduction Scheme (CPRS), which is likely to benefit renewable energy,
because it will improve the cost-competitiveness of renewable generation
by increasing the cost of fossil fuel generation. These attempts had
however failed, due mainly to the lack of bipartisan support for the
CPRS and growing public concerns in regard to the cost of climate change
policies following the 2007-08 financial crisis (McDonald, 2015). Later,
a modified carbon pricing scheme was introduced (in 2011), which
commenced with a fixed price of \$23/t CO\textsubscript{2} in 2012-13,
and \$24.15/t CO\textsubscript{2} in 2013-14 (Clean Energy Regulator,
2015).

\textbf{2013-2018:} The carbon pricing scheme was however repealed in
2014 by the Coalition government as a fulfilment of their campaign
commitment (Crowley, 2017). The Coalition government also called for a
review of the prevailing renewable energy policies. This has resulted in
a significant roll-back of policy support for renewable energy, most
notably, a reduction in the 2020 targets for renewable generation from
41,000 MWh to 33,000 MWh (Cox, 2015), reduced investments by the Clean
Energy Finance Corporation (CEFC) in renewable projects
(McKenzie-Murray, 2015), and abolishment of Climate Commission (Arup,
2013). These led to a sharp reduction in renewable investment since
2014, which only began to recover recently (Ludlow, 2018).

In 2017, a new policy scheme -- National Energy Guarantee (NEG) -- was
proposed by the Coalition government to attract investment in
low-emission generation technologies while ensuring the reliability and
affordability of electricity. The proposed NEG is made up of two
components, namely, the reliability guarantee, and the emissions
guarantee. The reliability guarantee requires electricity retailers to
have certain amounts of their peak demand covered by dispatchable
capacity (\emph{e.g.,} coal, gas, hydro and battery storage). The
emissions guarantee requires electricity retailers to purchase
electricity from the wholesale market to meet a defined emission
intensity level for that electricity. The reliability component of the
NEG is planned to start in 2019 and the emissions component to succeed
the RET in 2020 (Energy Security Board, 2017). Details of the NEG are
yet to be determined. It is expected that a high target for emissions
guarantee will be required to provide additional incentives for
renewable investment, because about 4,300 MW of renewable projects are
already committed or under construction -- more than sufficient to meet
a low target for emissions guarantee (equivalent to 28\% of electricity
generated from renewable sources) currently under discussion (CEC,
2018).

\textbf{Regulation}

The responsibility of renewable energy regulation is shared between
federal and state governments. Table 1 provides a summarised overview of
key federal and state legislations for regulating renewable energy.
Details are discussed below.

The key federal legislations that regulate the renewable energy sector
include the following.

The \emph{Renewable Energy (Electricity) Act} was enacted in 2000 with
specific objectives to promote renewable generation. In particular, the
Act establishes a scheme -- the Mandatory Renewable Energy Target (MRET)
-- that mandates electricity retailers to purchase certain amounts of
their electricity from renewable sources. To provide certainty, the
target for renewable generation is expressed in the Act as a fixed
amount of electricity that must be sourced from renewable generators
each year; the initial target is 9,500 GWh of electricity by 2010, which
represents about 2 per cent of electricity supply in that year
(Parliament of Australia, 2014b).

The Act was amended in 2009, as the Renewable Energy (Electricity)
Amendment Act 2009. Major changes brought about by this amendment are:
1) expansion of the target for electricity generation to 45,000 GWh by
2020 (equivalent to about 20 per cent of electricity supply in that
year); 2) introduction of a Solar Credits multiplier, to provide an
additional incentive for the installation of solar PV systems; and 3)
provision of exemptions for emissions-intensive trade-exposed industries
(Parliament of Australia, 2014b). In the following year, the Act was
amended to split the scheme into two separate schemes: the LRET for
utility-scale renewable generators, and the SRES for small renewable
installations (such as, rooftop PVs and solar water heaters) (Parliament
of Australia, 2014b). Another major amendment was made in 2015, as the
Renewable Energy (Electricity) Amendment Bill 2015. As part of the
amendment, the LRET was reduced from 41,000 GWh to 33,000 GWh by 2020
(Cox, 2015).



\textbf{Table 1: Overview of key renewable energy legislations}\selectlanguage{english}
\begin{longtable}[]{@{}llll@{}}
\toprule
\begin{minipage}[b]{0.22\columnwidth}\raggedright\strut
\strut
\end{minipage} & \begin{minipage}[b]{0.22\columnwidth}\raggedright\strut
\textbf{Year}\strut
\end{minipage} & \begin{minipage}[b]{0.22\columnwidth}\raggedright\strut
\textbf{Legislations}\strut
\end{minipage} & \begin{minipage}[b]{0.22\columnwidth}\raggedright\strut
\textbf{Key features, outcomes}\strut
\end{minipage}\tabularnewline
\midrule
\endhead
\begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
Federal\strut
\end{minipage} & \begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
2000\strut
\end{minipage} & \begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
Renewable Energy (Electricity) Act\strut
\end{minipage} & \begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
establishment of MRET introduction of a renewable generation target:
9,500 GWh by 2010\strut
\end{minipage}\tabularnewline
\begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
\strut
\end{minipage} & \begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
2009\strut
\end{minipage} & \begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
Renewable Energy (Electricity) Amendment Act\strut
\end{minipage} & \begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
expanded renewable target: 45,000 GWh by 2020 exemptions for
emissions-intensive trade-exposed industries\strut
\end{minipage}\tabularnewline
\begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
\strut
\end{minipage} & \begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
2010\strut
\end{minipage} & \begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
Renewable Energy (Electricity) Amendment Act\strut
\end{minipage} & \begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
separation of MRET into LRET and SRES\strut
\end{minipage}\tabularnewline
\begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
\strut
\end{minipage} & \begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
2011\strut
\end{minipage} & \begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
Australian Renewable Energy Agency Act\strut
\end{minipage} & \begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
establishment of ARENA funding allocation (2013-2020): A\$3.2
billion\strut
\end{minipage}\tabularnewline
\begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
\strut
\end{minipage} & \begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
2012\strut
\end{minipage} & \begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
Clean Energy Finance Corporation Act\strut
\end{minipage} & \begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
establishment of CEFC funding allocation: A\$2 billion each year\strut
\end{minipage}\tabularnewline
\begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
\strut
\end{minipage} & \begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
2013\strut
\end{minipage} & \begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
Clean Energy Legislation (Carbon Tax Repeal) Bill Budget Saving
(Omnibus) Bill\strut
\end{minipage} & \begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
reduction of funding allocation for ARENA to A\$2 billion\strut
\end{minipage}\tabularnewline
\begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
\strut
\end{minipage} & \begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
2015\strut
\end{minipage} & \begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
Renewable Energy (Electricity) Amendment Bill\strut
\end{minipage} & \begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
reduction of LRET to 33,000 GWh by 2020\strut
\end{minipage}\tabularnewline
\begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
NSW\strut
\end{minipage} & \begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
2011\strut
\end{minipage} & \begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
Section 15A of the Electricity Supply Act 1995\strut
\end{minipage} & \begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
introduction of Solar Bonus Scheme until 2016\strut
\end{minipage}\tabularnewline
\begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
\strut
\end{minipage} & \begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
2013\strut
\end{minipage} & \begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
Renewable Energy Action Plan\strut
\end{minipage} & \begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
creation of Renewable Energy Advocate\strut
\end{minipage}\tabularnewline
\begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
\strut
\end{minipage} & \begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
2016\strut
\end{minipage} & \begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
Section 43ECA of the Electricity Supply Act 1995\strut
\end{minipage} & \begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
requirement for IPART to determine a voluntary FiT benchmark for
retailers\strut
\end{minipage}\tabularnewline
\begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
VIC\strut
\end{minipage} & \begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
2008\strut
\end{minipage} & \begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
Electricity Industry Act (VIC)\strut
\end{minipage} & \begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
introduction of various FiTs for different technologies\strut
\end{minipage}\tabularnewline
\begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
\strut
\end{minipage} & \begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
2017\strut
\end{minipage} & \begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
Energy Legislation Amendment (Feed-in Tariffs and Improving Safety and
Markets) Bill\strut
\end{minipage} & \begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
consolidation of existing FiTs\strut
\end{minipage}\tabularnewline
\begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
\strut
\end{minipage} & \begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
2017\strut
\end{minipage} & \begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
Renewable Energy (Jobs and Investment) Act\strut
\end{minipage} & \begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
introduction of renewable generation targets: 25\% by 2020, and 40\% by
2025 creation of the Victoria Renewable Energy Auction Scheme\strut
\end{minipage}\tabularnewline
\begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
SA\strut
\end{minipage} & \begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
2007\strut
\end{minipage} & \begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
Climate Change and Greenhouse Emissions Reduction Act\strut
\end{minipage} & \begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
introduction of a renewable generation target: at least 20\% by
2014\strut
\end{minipage}\tabularnewline
\begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
\strut
\end{minipage} & \begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
2009\strut
\end{minipage} & \begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
Climate Change and Greenhouse Emissions Reduction Amendment Act\strut
\end{minipage} & \begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
expanded renewable target: 33\% by 2020\strut
\end{minipage}\tabularnewline
\begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
\strut
\end{minipage} & \begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
2014\strut
\end{minipage} & \begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
Climate Change and Greenhouse Emissions Reduction Amendment Act\strut
\end{minipage} & \begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
expanded renewable target: 50\% by 2025\strut
\end{minipage}\tabularnewline
\begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
\strut
\end{minipage} & \begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
2008\strut
\end{minipage} & \begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
Electricity (Feed-in Scheme -- Solar Systems) Amendment Act\strut
\end{minipage} & \begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
introduction of FiTs for household solar\strut
\end{minipage}\tabularnewline
\begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
\strut
\end{minipage} & \begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
2011\strut
\end{minipage} & \begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
Electricity (Miscellaneous) Amendment Act\strut
\end{minipage} & \begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
introduction of FiTs for household solar PV\strut
\end{minipage}\tabularnewline
\begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
ACT\strut
\end{minipage} & \begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
2011\strut
\end{minipage} & \begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
Electricity Feed-in (Large-scale Renewable Energy Generation) Act\strut
\end{minipage} & \begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
establishment of an auction scheme for renewable projects\strut
\end{minipage}\tabularnewline
\begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
QLD\strut
\end{minipage} & \begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
2015\strut
\end{minipage} & \begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
Powering Queensland Plan\strut
\end{minipage} & \begin{minipage}[t]{0.24\columnwidth}\raggedright\strut
establishment of an auction scheme for renewable projects\strut
\end{minipage}\tabularnewline
\bottomrule
\end{longtable}

The Act is implemented through the Renewable Energy (Electricity)
Regulation 2001, which specifies the regulatory regime for governing the
MRET, especially the administration of registration and accreditation of
the Renewable Energy Certificates (RECs), and the issuance of exemption
certificates to emissions-intensive trade-exposed industries. The
Regulation has been revised several times since its inception, to
reflect amendments made to the underlying Renewable Energy (Electricity)
Act (as noted above).

The \emph{Australian Renewable Energy Agency Act} was enacted in 2011,
with a purpose to improve the competitiveness of renewable energy
technologies, and to increase the supply of renewable energy in
Australia -- through the provision of financial assistance for research
and the commercialisation of renewable technologies. The Act establishes
the Australian Renewable Energy Agency (ARENA) for this purpose (ARENA,
2018a). The funding allocation for ARENA was initially at A\$3.2 billion
over the period 2013-2020, and was later reduced to A\$2 billion, as a
result of the introduction of the Clean Energy Legislation (Carbon Tax
Repeal) Bill 2013, and the Budget Savings (Omnibus) Bill 2016 (ARENA,
2018b). In 2014, the Australian Renewable Energy Agency (Repeal) Bill
was tabled in the Parliament, with the intention of repealing the
Australian Renewable Energy Agency Act 2011, which would have the effect
of abolishing the ARENA (Parliament of Australia, 2014a). This Bill was
however rejected in the Parliament, due to strong public opposition --
129 out of 132 public submissions opposed the Bill (ARENA, 2014).

The \emph{Clean Energy Finance Corporation Act 2012} was enacted in
2012, with the objective of financing clean energy projects (such as,
renewable energy, and energy efficiency) that could help lower
Australia's GHG emissions. The funding allocation is at A\$2 billion
each year, for five years from 1 July 2013. The Clean Energy Finance
Corporation is established by the Act to manage this funding. In 2013, a
Bill was proposed in the Parliament, to abolish the Clean Energy Finance
Corporation Act (Parliament of Australia, 2013). This Bill was however
blocked in the Senate, and after a long period of discussion, abandoned
in 2016.

Australian state governments have also introduced a range of
legislations for regulating renewable energy within their jurisdictions.
For example:

In New South Wales (NSW), the state government introduced
the\emph{Renewable Energy Action Plan} in 2013, with the aim to guide
the development of renewable energy industry, and to support the
national target of 20\% renewable generation by 2020. Specific
objectives outlined in the Plan are: attracting renewable investment and
projects, building community support for renewable energy, and growing
expertise in renewable technology (NSW Department of Planning \&
Environment, 2016). Besides, a scheme was legislated in 2009, as the
\emph{Section 15A} of the \emph{Electricity Supply Act 1995 (NSW)} , to
provide fixed feed-in-tariffs (FiTs) for household solar PV
installations. The scheme is known as the Solar Bonus Scheme. This
scheme initially set the FiTs at 60 c/kWh. However, the government
announced major changes to the scheme in 2010, including a reduced FiTs
of 20c/kWh for new participants. The scheme was ended in 2016 (NSW
Department of Industry, 2016). Since then, solar FiTs began to be
provided in NSW under the arrangements known as Voluntary Retailer
Contribution, which allows each retailer to set their own FiTs. The
Independent Pricing and Regulatory Tribunal (IPART) is required by the
\emph{Section 43ECA} of \emph{the Electricity Supply Act 1995 (NSW)} to
determine a voluntary FiT benchmark for electricity retailers (IPART,
2016).

The Victorian government enacted the \emph{Renewable Energy (Jobs and
Investment) Act} in 2017, as part of a package of policy reforms
designed to deliver investment and jobs in the state. The Act is
targeted to ensure 25 per cent of the state's electricity generation
from renewable sources by 2020, and 40 per cent by 2025. The Victoria
Renewable Energy Auction Scheme (VREAS) is created to achieve these
targets (DELWP, 2018a). Besides, under the \emph{Electricity Industry
Act 2000} , various forms of FiTs had been provided to renewable
technologies until 2016. In 2017, the Act was amended to consolidate
these FiTs with the passage of the Energy Legislation Amendment (Feed-in
Tariffs and Improving Safety and Markets) Bill. The Bill also requires
the Essential Services Commission to determine the rates of FiTs each
year (DELWP, 2018b).

In South Australia, the state government enacted the \emph{Climate
Change and Greenhouse Emissions Reduction Act} in 2007. The Act includes
a renewable energy target of at least 20 per cent of electricity
generation and consumption by 2014, which was increased to 33 per cent
by 2020 in 2009, and 50 per cent by 2025 in 2014. Besides, FiTs have
also been provided in the state to encourage the uptake of residential
rooftop solar PV systems. These FiTs are regulated by
the\emph{Electricity (Feed-in Scheme -- Solar Systems) Amendment Act
2008,}and \emph{the Electricity (Miscellaneous) Amendment Act 2011}
(South Australian Government, 2018).

In 2016, the government of Australian Capital Territory (ACT) legislated
a target of sourcing 100\% of the state's electricity from renewable
sources. The ACT government also enacted the \emph{Electricity Feed-in
(Large-scale Renewable Energy Generation) Act} in 2011\emph{,} which
establishes an auction scheme for procuring renewable projects. Under
the scheme, private investors are invited to bid for renewable projects.
Winners are awarded long-term power purchase agreements (PPAs) with
`contract for difference' FiTs (ACT Government, 2017). Similar action
schemes have also been introduced in Queensland (QLD) for acquiring new
renewable capacity, under the \emph{Powering Queensland Plan} (DMEW,
2018).

\textbf{Institutions}

The previous sections presented key policies and legislations for
promoting renewable generation in Australia. These policies and
legislations have been made and implemented by a range of institutions
at both federal and state levels. Figure 1 provides a broad contour of
the current institutional structure for governing renewable energy
industry. Further details are discussed as follows.

\textbf{Figure 1: Current institutional structure of renewable energy: A
broad contour}

\textbf{Hosted file}

\verb`image1.emf`  available at \url{https://authorea.com/users/719452/articles/704412-renewable-energy-in-australia-policy-regulation-and-institutions}

The key federal institutions that govern the renewable energy industry
include the following.

The \emph{Council of Australian Government (COAG)} was established in
1992 as the principal institution in governing issues of national
significance or matters that need co-ordination by all Australian
governments. The \emph{Ministerial Council on Energy (MCE)} , as part of
the COAG, was established in 2001, to provide overarching guidance in
energy sector policy and planning. The MCE comprises ministers with
responsibility for energy from the federal government and all states and
territories. The MCE was merged with the Ministerial Council on Mineral
and Petroleum Resources in 2011, as the \emph{Standing Council on Energy
and Resources (SCER} ). Later, the SCER was replaced by the \emph{COAG
Energy Council} in 2013, as the outcome of efforts to streamline the
COAG council system (COAG Energy Council, 2018).

The \emph{Department of Industry, Tourism and Resources} was established
in 2001, and is responsible for policy-making and implementation in the
energy sector, including renewable energy. Following the 2007 election,
the responsibility for energy matters was transferred to the newly
created \emph{Department of Resources, Energy and Tourism} . This
responsibility was again transferred to the \emph{Department of the
Environment and Energy (DoEE)} , after the 2016 election. The DoEE is
responsible for administering various renewable energy legislations,
such as, the Renewable Energy (Electricity) Act, the Australian
Renewable Energy Agency Act, the Clean Energy Finance Corporation Act
(DoEE, 2018). It also oversees the institutions, responsible for
implementing these legislations. These institutions are:

The \emph{Clean Energy Regulator (CER)} was created in 2012 as the
independent statutory authority, responsible for administering schemes
legislated by the federal government for measuring, managing, reducing
or offsetting Australia's GHG emissions. One of these schemes is the
Renewable Energy Target scheme, under the Renewable Energy (Electricity)
Act (CER, 2016).

Created by the Australian Renewable Energy Agency Act,
the\emph{Australian Renewable Energy Agency (ARENA)} is responsible for
promoting the development, commercialisation and deployment of renewable
energy, through the provision of financial assistance for R\&D programs
in renewable technologies and early-stage commercialisation renewable
projects. The ARENA was initially provided with A\$3.2 billion funding
over the period 2013-2020. The funding was later reduced to A\$2
billion, as part of a A\$6 billion budget-saving package (Hopkin, 2016).

The \emph{Clean Energy Finance Corporation (CEFC)} was established by
the Clean Energy Finance Corporation Act in 2012, with the aims to
facilitate and increase flows of finance into the clean energy
technologies -- renewables, energy efficiency and low-emission
technologies (excluding CCS and nuclear). The CEFC makes commercial
investments in these technologies based on guidance provided by
responsible ministers (\emph{i.e.,} environment and finance) in the
forms of the Investment Mandate. It has been observed in the past few
years that the Investment Mandate has tended to direct the CEFC to
invest in certain renewable technologies (Keany, 2015).

Besides, in various Australian states, the Minister with energy
portfolios also has the responsibility for making and implementing
state-based support for renewable energy. This responsibility is
normally assumed by the Department associated with the Energy Minister,
such as, Department of Environment and Planning in New South Wales,
Department of Environment, Land, Water and Planning in Victoria,
Department for Energy and Mining in South Australia, and Department of
Natural Resources, Mines and Energy in Queensland. The Energy Minister
could also delegate the responsibility to an authorised entity. For
example, in New South Wales, the Energy Minister has transferred the FiT
regulatory functions from the NSW Department of Environment and Planning
to Independent Pricing and Regulatory Tribunal (IPART). This transfer
took effect in 2015 when IPART received a referral from the Energy
Minister to determine the annual solar FiT benchmark under Section43ECA
of the Electricity Supply Act 1995 (IPART, 2016).

\section*{Assessment of efficacy}

{\label{assessment-of-efficacy}}

This section assesses the efficacy of existing policy, regulatory and
institutional settings for renewable energy in Australia. This
assessment is made based on the insights gained from a review of key
policy, regulatory and institutional settings (as presented in sections
3.1 to 3.3), complemented by some thoughts on the all-to-familiar
shenanigans of the policy and legislative processes. Some key points are
discussed as follows:

\begin{itemize}
\tightlist
\item
  \textbf{Lack of political constituency for redressing climate change
  challenge} : Although the enormity of climate change challenge is well
  recognised in Australia, the political constituency to act is limited.
  The review as presented in section 3.1 should substantiate this
  observation; this review clearly demonstrates that policy efforts for
  reducing total emissions in Australia have been largely insufficient.
  For example, despite growing public concerns about climate change, the
  National Greenhouse Response Strategy (NGRS) adopted in the early
  1990s mainly focused on no-regret measures for emissions reduction. In
  the mid-1990s, as the ineffectiveness of such measures became clearer,
  the National Greenhouse Strategy (NGS) was adopted, which went beyond
  no-regrets measures by introducing the Mandatory Renewable Energy
  Target (MRET) of having 2\% electricity generation from renewable
  sources by 2010. Despite some progress in promoting renewable
  generation, the NGS turned out to be insufficient for reducing total
  emissions, as it mainly reinstated the previously cancelled measures
  for emissions reduction. After the 2007 federal election, Australia
  drastically changed its environmental stance. The ratification of the
  Kyoto Protocol, expansion of the MRET to 20\% by 2020, and
  introduction of a national carbon pricing scheme thereafter firmly
  established a stance that prioritised emissions reduction. But this
  stance was short-lived, and a significant roll-back of policy measures
  for emissions reduction was witnessed after 2014 election, as the
  Coalition government repealed the carbon pricing scheme, reduced the
  renewable energy target to 33,000 MWh (equivalent to about 15\% of
  total generation in 2020), cut the funding for Clean Energy Finance
  Corporation, and abolished the Climate Commission.
\item
  \textbf{Piecemeal policy for promoting renewable energy} : In the
  absence of adequate political constituency, the renewable energy
  policy setting in Australia is characterised by piecemeal policy
  efforts for promoting renewable generation. As presented in section
  3.1, these policy efforts have primarily been made as a response to
  immediate pressure for the country to act on climate change. This
  pressure has arisen from increasing domestic concerns about climate
  change challenge and international commitment (\emph{e.g.,} Kyoto
  Protocol) to emissions reduction. The 2007-08 financial crisis
  appeared to have created a general anxiety about economic slowdown and
  its crippling effects on living standards. In such environments,
  issues of climate change have assumed a dormant role. The outcomes
  have been a significant roll-back of policy support for renewable
  energy, for example, reduced the renewable energy target to 33,000
  MWh.
\item
  \textbf{Regulatory uncertainty} : Under the guidance of above-noted
  piecemeal policy, the task of developing effective regulation has
  become extremely difficult. This is so because any major policy change
  typically needs change in the underlying regulation, which requires
  recourse to time-intensive, and sometimes confrontational, legislative
  processes. The outcomes are therefore significant regulatory
  uncertainty. This viewpoint gets further substantiated by a review of
  the legislative landscape, as presented in section 3.2. This review
  shows that renewable energy legislations have been subject to frequent
  change in Australia, mainly as the results of underlying policy
  changes.
\item
  \textbf{Limited institutional capacity} : The institutional
  arrangements for making and implementing renewable energy policy and
  regulation are well-developed in Australia with clear delineations of
  institutional responsibilities (Figure 1). Notwithstanding the
  satisfactory assignation of institutional responsibilities, the
  capacity of these institutions to fulfil their responsibilities is
  limited by factors, such as, frequent institutional change
  (\emph{e.g.,} department reorganisation), reduction in budget
  allocation, and political interference. A review of the institutional
  landscape -- as provided in section 3.3 -- should provide some
  credence to this viewpoint.
\end{itemize}

The above discussion identifies major lacunae in the existing policy,
regulatory and institutional settings. This discussion is further
extended below, with the view to draw out some points that will need to
be considered in order to improve the efficacy of the policy, regulatory
and institutional settings. This extended discussion is developed based
on the insights gained from a review of broader policy settings in
section 2. Some of the main points are as follows.

As presented in section 2, the electricity policy setting in Australia
has historically favoured cheap and abundant indigenous fuels
(especially, coal) for power generation, to subserve wider priorities
and agendas of socio-economic development of the country. In such
environments, issues of climate change have become subordinate to wider
socio-economic priorities, hence a lack of political constituency for
redressing climate change challenge. Piecemeal policy efforts for
promoting renewable generation, significant regulatory uncertainty, and
limited institutional capacity are therefore natural outcomes, as a
rapid increase of renewable generation would undermine the wider
socio-economic priorities that have favoured coal-based generation.

To rectify the situation will require the formation of a national
consensus to shift wider developmental priorities towards the
development of a low-carbon economy, because this consensus will
facilitate the development of more effective policy, regulation and
institutions for promoting a major transformation of the existing
coal-dominated generation mix, aimed at reducing emissions from power
generation. The formation of such a consensus will be the outcome of a
complex and challenging political bargaining process, through which
various affected interests will be accommodated.

\section*{Conclusions}

{\label{conclusions}}

This paper has assessed the policy, regulatory and institutional
settings for renewable energy in Australia. The assessment suggests that
the existing policy, regulatory and institutional settings are
characterised by a general lack of political constituency for redressing
climate change challenge, thereby piecemeal policy efforts for promoting
renewable generation, significant regulatory uncertainty, and limited
institutional capacity.

The assessment also suggests that this lack of political constituency is
essentially a reflection of the broader electricity and socio-economic
policy settings, which have historically favored cheap and abundant
indigenous coal for power generation, to serve wider socio-economic
priorities and agendas. In such environments, issues of climate change
have become subservient to wider socio-economic priorities. The
inefficacious renewable energy policy, regulations and institutions are
therefore `natural' outcomes.

It is therefore reasonable to argue that effort to defossilise
electricity generation through, for example, promoting renewable
generation is more likely to bear fruit, if there is a national
consensus to develop a low-carbon economy. The formation of this
consensus will clearly require a considered accommodation of various
affected interests through political bargaining processes.

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