On the weekend it emerged that Treasurer Joe Hockey and Finance Minister Mathias Cormann had drafted a letter to the Clean Energy Finance Corporation, telling the $10 billion “green bank” to stop investing in wind power.
The Australian Conservation Foundation’s climate change program manager, Victoria McKenzie-McHarg writes:
- It’s hard to imagine a fledgling industry being attacked and undermined by a national government the way the renewables sector is by the Abbott Government.
She explains the background of the CEFC:
- Funding for renewable energy in Australia was struggling to match commercial needs, with the result that Australian-made technology was going to China, California and Spain.
The idea was that the Clean Energy Finance Corporation would help keep Australian technology here, creating Aussie jobs. The plan was to help Australia move to a lower carbon economy and help renewable energy projects with financing solutions.
The CEFC’s stated mandate is to “facilitate increased flows of finance into the clean energy sector”.
Put simply, the CEFC was to back winners, not minnows. The organisation set up to help minnows was ARENA.
Craig Froome of the Global Change Institute at The University of Queensland explains:
- Most people would agree that emerging renewable energy technologies need support, particularly during the “not mature and not commercial” stage. But that is the job of the Australian Renewable Energy Agency (ARENA). This body was put in place to provide funding (not loans) to develop emerging technologies to a point where the commercialisation stage is within reach. Then, with commercial viability on the horizon but not yet secure, the CEFC can step into a zone where commercial lenders might not dare tread.
- …to improve the competitiveness of renewable energy technologies and to increase the supply of renewable energy within Australia.
- The CEFC focuses on projects and technologies at the later stages of development which have a positive expected rate of return and have the capacity to service and repay capital.
Illogically the Abbott Government has directed CEFC to double its rate of return without increasing risk.
That and the attack on rooftop solar looks like a bloody-minded attempt to make life difficult for the CEFC and to set them up to fail. CEGC is seeking legal advice.
Stephen Keim QC thinks the CEFC could have legal grounds to fight the wind and roof-top solar ban.
Ben Eltham says Tony Abbott and his cabinet have remained ruthlessly focused on destroying the renewable energy industry, by any means necessary. Abbott is trying to eliminate a competitor to coal and to pander to the anti-climate change ideologues in his own party.
It’s about stopping a left wing plot to take over the world, or something.
- Journalists like to talk about narratives, a vastly overrated method of analysis. But there is a sense that the government is currently without one. It is careening around the policy landscape, with almost no coherent logic or even a forward policy direction.
With no real platform beyond tearing down Labor institutions and reputations, Prime Minister Abbott appears lost in a fog of increasingly opaque anger and paranoia.
Peter Chen suggests that for Abbott wind farms are “a physical embodiment of the political and cultural left.”
Last week the CEFC created news by working with banks and non-bank lenders to establish cheap loans for green projects such as electric vehicles, battery storage, rooftop solar arrays. The aim was to set up a new asset class, a kind of green bond, making finance up to 25% cheaper.
The CEFC looks like a well-managed organisation with plenty of initiative. It should be allowed to get on with its business.