Climate

Australian Government Deals Big Blow To Public Investment In Renewable Energy

CREDIT: AP Photo/Wong Maye-E

In another blow from Prime Minister Tony Abbott’s administration to clean power, Australia’s renewable energy investment agency has been told not to invest in wind farms or small-scale solar projects.

Opposition leaders and solar energy supporters say the government directive prohibiting the Clean Energy Finance Corporation (CEFC) from investing in rooftop solar will cripple the industry and further diminish Australia’s chances of transitioning to a clean energy economy.

“I don’t agree with the prime minister that if you just don’t have any government support for the future of renewable energy, that the renewable energy will just miraculously grow and increase in Australia,” opposition leader Bill Shorten told the Australian Broadcasting Corporation. He told reporters that striking wind farms and rooftop solar from the CEFC will mean that “the only thing the CEFC can invest in is flying saucers.”

The CEFC is a public fund that has invested more than $3 billion in clean energy projects and technologies. Wind and solar accounted for nearly half of CEFC’s portfolio last year.

Without wind and small-scale solar, the CEFC can ostensibly only invest in what Abbott calls “new technologies,” such as bioenergy and ocean power. The fund also invests in efficiency projects, such as energy monitoring systems, industrial improvements, and refrigeration technology.

CEFC funding often goes to projects for low-income households, renters, and public housing residents. Those households often rely on the CEFC’s support to go solar, said John Grimes, the head of industry group Australian Solar Council.

“To say this is about lowering the costs of power is cynical in the extreme,” Grimes told Guardian Australia. “What they’re doing with this is the precise opposite.”

The directive followed failed attempts to completely dismantle the CEFC, despite broad public support for clean energy in Australia. Prime Minister Tony Abbott has been as clear in his desire to do away with the CEFC, as he has been strident in his support for the country’s coal industry.

“It is our policy to abolish the Clean Energy Finance Corporation because we think that if the projects stack up economically, there’s no reason why they can’t be supported in the usual way,” Abbott told reporters in Darwin.

According to official documents, the CEFC currently expects an average lifetime investment portfolio yield of approximately 6.5 percent. That means its investments are expected to return the taxpayers’ money — with a profit .

It is possible the CEFC will fight the new policy, which could be in opposition to its mandate “to facilitate increased flows of finance into the clean energy sector.” In a statement on the fund’s website, the board said it is “seeking advice” on how to respond to the directive.

Under the 2012 law establishing the CECF, the organization is meant toinvest “using a commercial approach to overcome market barriers and mobilize investment in renewable energy, energy efficiency and low emissions technologies.”

From 2013 to 2014, Australia’s investment in clean energy projects fell 70 percent, Bloomberg New Energy Finance (BNEF) found. Abbott came into power in September 2013.

In July 2014, Australia became the first country to repeal its carbon price, despite the fact that it was successfully working to cut carbon emissions. In May, the country slashed its renewable energy goal for 2020 by nearly a quarter — from 41,000 to 33,000 gigawatt hours.

The environment editor of the Sydney Morning Herald criticized the new directive in an op-ed Monday, writing, “If Australia is to realise its remarkable renewable energy wealth… banks and investors will need to active players. And that is where the $10 billion Clean Energy Finance Corporation — again under fire by the Abbott government — is absolutely crucial.”