Reducing Australia's renewable energy target will not lead to
a fall in power prices, one of the country's leading industry groups
has warned.



In a move that will pressure Prime Minister Tony Abbott to
retain Australia's goal of producing at least 20 per cent of all
electricity from renewable sources by 2020, the Australian Industry
Group has urged the government not to abolish or drastically cut the
target.




AIG, which represents more than 60,000 businesses, said the
RET had lowered wholesale power prices and there would be little benefit
to consumers if the target was lowered.



The comments are in contrast to statements Mr Abbott made
last year that the RET was causing electricity price rises at a time
when Australia ought to be ''an affordable energy superpower''.




There are growing fears that the government plans to scale
back the target after Australia's flagship clean energy development
agency - the Australian Renewable Energy Agency - was axed in last
week's budget.



In a submission to the government's review of the RET, the
AIG said unwinding the target would require major compensation to
businesses that had already made significant investments in renewable
energy. It said this would have to come via the federal budget or ''an
ongoing payment by electricity retailers - and ultimately energy users -
in a closed, grandfathered version of the RET''.



AIG chief executive Innes Willox said on Tuesday that neither
deep cuts in the target nor abolishing the RET altogether would
deliver ''overall benefits to energy users''.



''After consulting with our diverse membership and reviewing
the evidence currently available, we have judged that reducing the RET
is likely to cost energy users as much in higher wholesale prices as it
saves them in direct RET charges,'' Mr Willox said.



''The RET has swings and roundabouts for energy users.



''The cost of building wind farms and solar panels is passed
on to retail customers, but the extra energy generated adds to supply in
the electricity market, depressing wholesale prices somewhat.''



The industry group's submission is critical of the continued
upheaval of Australia's climate and energy policies and the lack of
detail surrounding the implementation of the government's emissions
reduction fund to cut carbon emissions.



It says the current policy parameters and uncertainty had led to concerns it would not be possible to meet the target by 2020.



The comments follow publication of modelling that found axing the RET would mean higher energy bills by decade's end.



In its submission, the Climate Institute argues the RET will
become more important in reducing emissions if the carbon tax is
repealed.