Abbott government says war on renewables not over yet

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The Abbott government may be in its death throes, but it is still determined to do as much damage to the renewable energy industry as it can. It still wants to cut the RET by one third, and dump agencies such as the CEFC and ARENA, and now it is targeting solar.

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The Abbott government has made clear that its war on renewable energy in Australia is far from over, and it still intends to scrap the $10 billion Clean Energy Finance Corporation, as well as chop the head (and shoulders) off the renewable energy target.

Reports out of Canberra and from the corridors of power suggest that these are the dying days of the Abbott regime, and the influence of the Far Right that underwrote his arrival in high office. But they are not going down without a fight.

Finance Minister Matthias Cormann says the government still wants to scrap the CEFC, despite the fact that the fund will deliver a profit to the government, and could potentially help make up the shortfall in emissions abatement from the Direct Action program.

“It would be our intention to revisit that at the right and appropriate time so, from the government’s point of view, there hasn’t been any change in our policy position,” Senator Cormann told a Senate Estimates hearing on Wednesday..

Field of Renewable Green Energy Solar Mirror Panels

This comes on top of the government’s determination to de-fund and scrap the Australian Renewable Energy Agency, and to dramatically reduce the renewable energy target, an achievement that will deliver it another world-first, along with its decision to scrap the carbon price.

Even though the government has moved from its original position to dump the target, and then insisting it be cut from 41,000GWh to around 27,000GWh, it still wants the target to be reduced significantly, to around 32,000GWhh, which would, in effect, cut the task at hand by one-third.

It cannot legislate that change, because of the numbers in the Senate, so is holding talks with Labor, attempting to strike a compromise. But it is in no hurry to do so, because while the uncertainty remains, the large-scale renewable energy industry remains at a standstill, to the benefit of the incumbent fossil fuel generators. It has been six months since the discredited Warburton review completed its report.

Those talks now have the added complexity of being held while everyone is trying to work out who is in charge in Canberra, or who will be in a fortnight. Will a deal be sought before Abbott’s troubled reign is terminated? Or will the negotiators wait until there is a new PM? It is hard to work out exactly what the tactics of the various parties might be.

Big business is growing frustrated with the delays, with both the Business Council of Australia – which wants the RET cut back sharply – and the Industry Australia Group, which largely supports it – calling for a quick resolution.

Even Clive Palmer is back in the act, appearing at a press conference on Thursday morning with former Liberal leader John Hewson and calling for clarity on the RET. Greens leader Christine Milne wants Labor to hold firm and resist any changes.

“It is not broken. It does not need fixing,” Milne said on Thursday. “It must stay at 41,000GWh and be increased out to 2030 in order to restore confidence and to reduce pollution.”

While this is going on, the generators themselves are threatening a “boycott”, or a capital strike on investments, saying they would choose to pay a penalty price of $93 per MWh (megawatt-hour) rather than contract for new wind or solar farms.

The threats are based on the assumption that it is impossible to meet the 41,000GWh target in the 2020 timeframe, or that it cannot be done below the penalty cost.

This has been debunked by the industry, who point to enough “shovel-ready” wind projects, not to mention a growing portfolio of small and mega-scale solar farms, that could meet the target.

Miles George, who heads Infigen Energy and is also chairman of the Clean Energy Council, said on Wednesday that the “boycott” by the major retailers – if it eventuated – would merit investigation by regulators. He said the threat didn’t make sense, noting that his company, and all the others, could easily build enough wind and solar at a lower cost than the penalty price.

But the generators’ position has been repeatedly endorsed by the government, and environment minister Greg Hunt in particular, who has been arguing in radio interviews that the RET is an effective $93 carbon tax on consumers. ($93 is the effective penalty price)

In October, Hunt told 2GB:

“What we don’t want to see is this risk under Labor’s scheme of a carbon tax of $90 per tonne equivalent. You know, almost four times greater than the carbon tax that, you know, the Australian people just voted to get rid of. And that would be a very odd thing to do and look, I actually think that this is one area where we can get bipartisan support with Labor.

And he told Sky News in December:

“Are they really going to inflict a $93 a tonne carbon tax on the Australian people? And this year, in the first six months, now is the time for them to release their own explanation of what is the carbon tax they would be putting on the Australian population.”

We discussed in more depth Hunt’s arguments here. His position has appalled some in the renewables industry, who describe his comments as ludicrous. They point out that the RET is neither a tax, nor in any way referenced to a tonne of carbon. The government’s own modeling shows that the 41,000GHw target can be met, and that the cost of the RET is offset by falls in wholesale electricity prices. The principal victims of that price fall are coal-fired power plants.

As it turns out, there are growing signs of a corporate market in Australia for renewable energy generation that could partly get around any boycott by the retailers. The corporate market – as in the US and Europe where giants such as Apple, Google, General Electric and Ikea are investing heavily in wind and solar – is interested not just in saving money, but also corporate branding and reputation, an aspect the retailers in Australia appear to think they can paper over.

Now, the renewables industry is concerned that the Abbott government will launch a politically motivated inquiry into the solar industry.

There is no doubt that Australia has proved a lucrative market for cut-price, and low quality solar panels. But the safety issues raised by Hunt, and some media, are overblown, the industry says. And it follows Hunt’s personal attacks on solar industry itself, and his demonisation of the RET support for rooftop solar as a massive cross subsidy.

carnegie maccaWhich is not to say that the Abbott government hates all renewables. Industry minister Ian Macfarlane, whose portfolio includes energy, was full of praise for the world-first grid connection of Carnegie Wave Energy’s multi-machine project off Garden Island (see picture right, with Carnegie boss Michael Ottaviano).

Macfarlane has been fond of wave energy for years, telling the renewables industry a few years ago that wind and solar were not up to the job, and wave energy was much more interesting. (Ironically, Carnegie’s next big project, a full-scale 3MW installation, will only go ahead because it is being funded by the two agencies Macfarlane and his government want to kill, the CEFC and ARENA).

This prompted a question a few weeks ago from RenewEconomy, noting Macfarlane’s recent absence from clean energy trade events and official openings of wind and solar farms.

No Abbott representative could be bothered to drive all the way out to Royalla (it’s a 24 minute drive from Parliament House) for the opening last year of the 20MW solar farm. Indeed, the only national government representative at the first large-scale solar plant to be connected to Australia’s main grid was foreign minister of Spain, who flew 24 hours. (The project developer was Spanish firm FRV).

Had the minister (Macfarlane), we asked, ever visited a wind farm? It turns out he has – a wind farm in Tasmania, his office tells me – in his days as energy minister in the Howard government, possibly around the time that he chose not to expand the then mandatory renewable energy target.

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17 Comments
  1. john 4 years ago

    The CEFC must go. It actually works but was put in place by the other mob so is bad.
    We now have the adult government, who are acting like kids ” anything they did is bad”
    This damb country needs mature and sensible government.
    I personally am sick and tired of this division and win at all costs point by point type of government system we are experiencing.
    Memo to Labour and the LNP [ Will you two get a life and remember your just there because we have confidence in you ]
    Translation ” get a life you pair of idiots I am sick of this continual childish low level moron bottom dweller politics”
    What do I mean?
    RE does work ok!!! get over it and implement it for the betterment of Australia.
    Failing to do this will render your party as a disconnected minority of the Australian population.
    No amount of false misleading items from your media backers will cover over the fact that RE is beneficial for everyone.
    Any party that tries to pull the wool over the electorates head will eventually be found out and once mislead I am afraid memories last a long time.

    • Chris Fraser 4 years ago

      From 2010 federal elections have not been a question of ‘which party has the best policies’, but ‘which party do I most wish to avoid getting power’. It’s an upside-down type of system.

  2. joe black 4 years ago

    what a bunch of looneys, can’t wait to vote them out! 🙂

  3. phred01 4 years ago

    Our beloved Toxic Dictator had near death experience some weeks back. He was so generous he gave the Bali 9 ring leaders the kiss of death using megaphone diplomacy . Our neighbours are so incensed do they are collection coins.
    http://www.bbc.com/news/blogs-trending-31588901

    • john 4 years ago

      I am hearing you and have cringe because of his actions this reflect very badly on Australia just remember the actions of a Government of a country is taken as the way every one in that country thinks.
      We are being viewed as a mob of carpet baggers a horrible picture.

  4. Open Air 4 years ago

    Let’s just ignore Tony and do it ourselves. Not everyone is uncertain about renewables – a bit of lateral thinking is all you need. openair.net.au.

    • Chris Drongers 4 years ago

      So OpenAir is not yet registered as a retailer, has no office location or office bearers listed on its website, has no generators or firm plans for generators and apparently no supply agreement with an existing generator.
      Sounds dodgy.

      • Open Air 4 years ago

        You’re right. Open Air is not a retailer yet, not even a company, and won’t be unless people get behind the idea. Starting an electricity retailer is a very expensive exercise, and we have no interest in spending money – anyone’s money – on something that has no traction.

        No-one’s asking for anything from you yet, Chris, except your interest. Rest assured, when enough interest is registered all of the things you speak of will be advertised.

  5. Leigh Ryan 4 years ago

    Anything the Abbott Government does can be reversed, although the damage they are doing will tarnish the whole country for a decade, it’s clear that the big retailers are well and truly behind Abbott and the best and only way to deal that union a death blow is for everyone in Australia to close their accounts with those retailers, so you have a contract fine, cancel it when your times up, it’s the only way to deal with the greed, dishonesty and outright arrogance of both the power retailers and the current government.

    • Peter Campbell 4 years ago

      And tell them why you are moving.

    • Alan Hunter 4 years ago

      Not so sure about reversing anything, it depends on the makeup of the Senate.

    • BarleySinger 4 years ago

      >Anything the Abbott Government does can be reversed

      In terms of legislation yes, new laws can be passed. But in terms of damage to the planet, and the massive poisoning of most of Australia’s most fertile soil (and the entire water table of that region) – *NO* – that cannot be undone. The damage which has already been done in Queensland and in NSW, is going to stay that way forever. You can’t remove the BTEK chemicals from the water or prevent them from moving up through the soil & into the air (for centuries). You also cannot remove the radioactive elements that they have been freeing up, which are now in the water table (thorium, radium, uranium, etc).

      Some things cannot be undone.

      • Concerned 4 years ago

        Astounding.Which State and Federal Govts approved those development?

  6. Blair Donaldson 4 years ago

    Hopefully the continuing incompetence & internecine warfare will render the entire government ineffectual and something will occur to cause an early election. It’s getting beyond a joke.

  7. José DeSouza 4 years ago

    With a Prime Minister like that who needs foreign enemies?

  8. onesecond 4 years ago

    Abott is Australia’s Grinch and it is not stealing Christmas, it is stealing the future.

  9. john 4 years ago

    I so remember the PM making a speech about how the CEFC was part of the governments clean energy program.
    Having failed to get rid of it he had the audacity to put it up as part of his governments commitment.
    The people from overseas of course would not know the real story as Australia is not exactly front and centre on any other countries area of interest.
    It is really sad that we now have win at all cost oppose anything the other mob put up politics and window dress the story with dog whistle messages.
    This is school yard debate not that of a mature adult I am afraid.
    As soon as the present government can get the numbers the ARENA and the CEFC will be done away with.

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