I guess the saying goes that no good deed will go unpunished when it comes to climate change.
The CEFC, a highly successful organisation and careful steward of taxpayer’s money, is being attacked again by a Liberal government.
It is one thing for the Energy Minister to use perfectly adequate existing powers to ask the CEFC to more carefully consider grid stability assets. It is another thing entirely to demand that it invest in polluting gas assets and lose taxpayers’ money.
This is a bold attempt to destroy the culture of the organisation and its staff. Staff have selected to work at the CEFC out of their genuine desire to assist Australia’s transition to a low carbon economy.
Only an Energy Minister who doesn’t care for the organisation would try to make staff lose money by lending to new, unnecessary gas assets that slow down the transition. This government is asking CEFC staff to undertake activities that they fully understand will damage themselves, their family and their fellow citizens.
The attempt to use the CEFC to fund gas projects shortlisted under the Underwriting New Generation Investments (UNGI) program through a new $1-billion Grid Reliability Fund (GRF) won’t work. The whole attempt is a farce.
The CEFC can finance projects that support achievement of a low-emission system, but it can’t finance any new gas assets that end up crowding out, or delaying, alternative investments in clean energy solutions.
Therefore, the CEFC cannot finance any new assets unless they are sure they won’t force clean solutions out of the market.
The weak reference by the CEFC in their “welcoming” press release to the proposed changes says it all.
The only gas investments the CEFC has financed previously were around biogas, or waste gas that was being flared or released as fugitive emissions. They could never, and will never, finance any of the assets in the proposed UNGI because they legally can’t.
In a recent report issued by Aurora Energy Research, independent analysts established clearly the risks presented to the achievement of a low-emission system should new gas assets, like those proposed in UNGI, be built.
Their analysis suggests that these assets, especially if subsidised into existence, will actually delay the transition to a low-emission system. They will either crowd out the much-needed clean investment solutions or worse, become assets that operate most of the time thereby removing the very reason they were being built.
Unfortunately for the Energy Minister, the analysis by Aurora is very clear and reflects the views of most participants in the energy market at the moment. It is already hard enough to build and finance pumped hydro assets or batteries as price forecasting is complex but for the government, through the CEFC, to finance assets that exacerbate that problem is inconsistent with the CEFCs Act.
Once again, it will delay the achievement of a low-emission system.
It is time Federal Parliament sent the Energy Minister a clear message and just threw the changes to the CEFC Act out.
Don’t stuff up an organisation and culture that is working well for all taxpayers by trying to make it give loss-making loans that it cannot legally make.
Don’t pollute the CEFC.
Oliver Yates was CEO of the Clean Energy Finance Corporation from 2012 – 2017