The federal government has rejected calls to dump its promise to have 20 per cent of electricity generated from renewable sources by 2020.
The government's own climate adviser, Ross Garnaut, and peak business groups are worried the target will force up the price of electricity too high.
They say emissions trading will do the job of greening up electricity, so there's no need for the Renewable Energy Target (RET).
But federal Resources Minister Martin Ferguson says the RET is here to stay.
"The government's got a commitment to introduce a renewable energy target of 20 per cent by 2020 and we will remain committed to it," he told reporters in the NSW city of Queanbeyan today.
"We have work underway to actually put the system in place."
It would be difficult to implement the two schemes at the same time.
"It's not easy, it's hard work. But then again you've got a government that actually wants to achieve some things," Mr Ferguson said.
Last week, Prof Garnaut's final report said the RET had "potentially distorting effects" and should be phased out once emissions trading was fully operational.
Because renewable energy is generally more expensive than coal and gas, sticking with the RET would make electricity more expensive, he warned.
Without the RET, about 12 per cent of energy would come from renewable sources by 2020, according to the report. If the RET stays in place, it will cost up to $1.1 billion a year to meet the target.
The Australian Industry Group yesterday called for the RET to be scrapped.
Mr Ferguson, who was visiting Queanbeyan's new Dyesol factory which manufactures parts for solar panels, was less convinced about the need for a premium feed-in tariff for renewable energy than he was about the RET.
State and territory governments were talking about a national premium tariff, he said.
"Let's see where the processes end up."
Mr Ferguson is seen in some quarters as a staunch defender of the coal industry rather than a convert to renewable energy.
His unequivocal commitment to the RET today may have recast that perception a little, but the green tinge was only partial.
Dyesol managing director Gavin Tulloch says Australia's future lay in renewable energy.
"Don't tell the coal industry," Mr Ferguson interjected.
This prompted a spirited response from Dr Tulloch.
"I was actually not going to say anything, but I think it's very true that coal has had a very good run and the rest of us are now looking for an equal share," he told the minister.
