Federal parliament is set for yet another showdown over national energy policy, with federal Labor and the Greens indicating they will vote against a series of legislative amendments proposed by the Morrison government that could see billions in taxpayer funds directed into failing fossil fuel projects.
The fight is over the future of the Clean Energy Finance Corporation (CEFC) after the Morrison government introduced proposed legislative amendments to establish a $1 billion Grid Reliability Fund, that would open up the green financing body to investing in gas projects.
Federal energy and emissions reduction minister Angus Taylor insists that the CEFC can already invest in gas projects, however the examples cited by Taylor as CEFC gas investments were not originally made by the clean energy finance body.
The proposed amendments, introduced into parliament by Taylor, would also allow the CEFC to make investments in loss making projects, which could see funds intended for clean energy projects directed towards propping up failing fossil fuel projects.
The amendments also include a refined definition of ‘low emissions technologies’ that are designed to allow the CEFC to make investments in gas projects.
Opposition climate and energy spokesperson Mark Butler said that while the Labor party supported the establishment of a dedicated Grid Reliability Fund, but that it would oppose amendments that seek to expand the CEFC’s investments into the gas industry.
“Labor supports the expansion of the CEFC to help deliver a modern electricity grid, but not for gas generation investments that are neither a new technology, nor meet the existing CEFC definition of low-emissions technology,” Butler said.
“This is the clean energy financing body – not for new gas generation. We’ll safeguard the financial integrity of the CEFC, to ensure it retains strict safeguards which ensure it only invests in economically viable projects that continue to provide a return to taxpayers.”
Butler said that Labor would also move to oppose amendments which would give federal energy minister Angus Taylor greater powers over how the CEFC directs its investments.
“We’ll also block any attempts to turn the CEFC into a personal slush fund by giving new powers to scandal-ridden Minister, Angus Taylor, who has an ideological opposition to renewable energy, and thinks a good use for taxpayer money is expensive new coal-fired power stations,” Butler added.
“If the Government is unwilling to accept these sensible amendments to be moved by Labor, we will vote against the Bill.”
The Morrison government needs the legislative amendments to pass, as it is counting on the establishment of the $1 billion Grid Reliability Fund to cover the costs of commitments it is making under the Underwriting New Generation Investments program.
Last year, the Morrison government shortlisted a dozen projects, including proposed new gas generators and pumped hydro energy storage projects under the UNGI program, but progress has stalled as the government has no legislative authority to actually underwrite the projects.
Federal energy minister Angus Taylor said that Butler’s interpretation of the legislation was wrong, and that the CEFC already has the ability to invest in gas projects.
“Today Mark Butler wrongly claimed that gas generation investments don’t meet the existing definition of a low-emissions technology contained in the Clean Energy Finance Corporation Act 2012, among other false claims,” Taylor said in a statement.
“Greg Combet, the Minister who oversaw the establishment of the CEFC, acknowledged in his second reading speech that conventional gas “may technically be eligible for funding as a low-emissions technology.”
However, it appears to be Taylor who has gotten his own wires crossed, as RenewEconomy has been unable to identify any gas project that received investment under the CEFC’s criteria.
Taylor pointed to a conventional gas peaker project and a waste coal mine gas project that the CEFC holds investments in, which were both made under the former Labor government. It appears that Taylor is referring to a 10MW gas peaking plant build by NovaPower, as part of a $11 million pilot project, that is owned in part by the CEFC.
However, the CEFC did not make the original investment in this plant, and the investment was not made under the CEFC’s investment eligibility rules. The original investment in the NovaPower gas peaking plant was made under the former Low Carbon Australia program, and was subsequently inherited by the CEFC when that program was wound up.
So while the CEFC now has an investment in the gas peaking plant, it was not the agency that made the initial investment and it was never assessed under the CEFC’s ‘low emissions technology’ criteria.
Taylor also made reference to an investment the CEFC held in Energy Developments Limited (EDL), which operated a range of landfill gas, waste coal mine gas and remote energy systems. However, the $75 million investment the CEFC sought to make in EDL was quickly repaid back to the CEFC when EDL was acquired by the DUET Group in 2015.
Australian Greens leader Adam Bandt has indicated that his party will oppose changes to the CEFC legislation, rejecting the plan to redefine ‘clean energy technologies’ as inclusive of gas.
The main battleground for the legislative amendments will be the federal senate, where the Morrison government holds a minority of the seats and where it may be reliant on Pauline Hanson’s One Nation party to successfully pass the amendments.
