Fiddling the books on renewables while the planet burns

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Solar energy is a great success story in Australia. It has been the backbone of the renewable energy revolution at the personal level. People love it and can’t get enough of it. It has been the game changer transforming households from passive energy users to proactive energy generators.

The old fossil fuel vested interests have thrown everything at it from refusing to reform the National Electricity Market rules, to destroying feed in tariffs, to undermining the Renewable Energy Target, repealing the carbon price and maintaining fossil fuel subsidies – but still the revolution gains momentum.

People are now looking to residential batteries coming down the cost curve so that they can escape the system. They want to control their energy supply and demand, and their energy bills, at the same time without constant adverse interference. Electric vehicles are the icing on the cake.

A key component of the current momentum and the solar revolution is the renewable energy generation and energy efficiency brains base Australia has developed over time in our universities and research institutions. We have some of the best scientists and researchers in the world. But they struggle to stay employed and to secure research grants.

I came to understand that very well when I watched the manipulation and gross incompetence of those Ministers and bureaucrats designing and overseeing the Solar Flagship program. The rules were written in such a way that the grants were inaccessible to those who needed them. The time delays between grant advertising and any being made were ridiculously long. In the 2010 election campaign money was taken out of Solar Flagships and other renewable programs to fund Cash for Clunkers and for the flood levy.

So when the opportunity arose to fix it, as part of the negotiations to secure the Clean Energy Package, I took it. Renewable Energy was to be supported from earliest research and development through to pilot stage and then on to commercialisation. It would be done through two new independent and interdependent statutory authorities with independent boards. Both had legislated funding. ARENA had $3 billion funding from the budget and CEFC from an off budget $10 billion.

Solar flagships and other Renewable energy programs were rolled into ARENA, which would concentrate on grant funding from earliest stage to pilot stage. The Clean Energy Finance Corporation would then overlap to an extent from pilot through to commercialisation and beyond by providing loans. The profits from the CEFC investments would be recycled into ARENA giving it an ongoing grants funding base.

The independent statutory authority arrangement was to stop hostile Ministers from raiding and undermining the purpose for which they were set up. The compromise was Martin Ferguson as Energy minister retained them in his portfolio but had no power to wreck them. I announced the new arrangements at a Clean Energy Conference. ARENA and the CEFC were hard fought and huge wins for the Australian Greens and for the country.

The Abbott Government tried to destroy them both, but the design of both – with their own carefully written legislation and finance arrangements – saved them from political interference beyond the efforts to rewrite the investment mandate of CEFC and destroy the Boards. The Senate was the insurance against bad governments. The need for parliamentary approval to abolish them or take money from them has lasted the distance, notwithstanding the 2014 budget in which Tony Abbott with the support of Clive Palmer’s PUP, Muir et al took $700 million from ARENA.

That is why I am so disgusted by the current behaviour of the Labor Party. It was The Australian Greens in negotiation with PM Julia Gillard and Minister Greg Combet who delivered ARENA and CEFC and protected them from Martin Ferguson and future hostile Governments. It would be ironic indeed if it is Labor’s Bill Shorten and Mark Butler who carry on Ferguson’s agenda, maintain fossil fuel subsidies and cripple early stage research in Australia via ARENA by taking $1 billion grant funding from it. They apparently don’t value the Gillard government legacy or the investments made by ARENA and CEFC but that of course won’t stop them from visiting them renewables projects, hard hats and flouro vests at the ready.

As to the utter nonsense of a fabulous new fund for solar thermal. Give me a break. CEFC has a $10 billion fund on which to draw on the recommendation of its experts and its board and under the guidance of its legislation. What Malcolm Turnbull did was to engage in political interference by requiring $1 billion of the existing fund be set aside for solar thermal. CEFC has solar thermal already on its watch but the profit margins that Matthias Cormann and PM Turnbull have tried to impose are the very thing that will slow it down.

But in this post-truth and post-fact politics world, a sleight of hand raiding ARENA of $1.3 billion to spend on anything other than renewable energy and rebadging an existing $1 billion as a new fund is regarded as genius for the Liberals. While Labor doing the same is regarded as responsible “budget repair”.

It is actually a direct attack on the rapid transition to renewable energy, on innovation, on research and jobs but most importantly it is a direct attack on addressing the ever accelerating climate emergency. Instead of getting onto a war footing and rapidly transitioning to 100% renewable energy, LNP and Labor are fiddling the ecological and budget books while the planet burns.

Christine Milne is a former Senator and former leader of The Greens.  

  • suthnsun

    Yes, and literal burning

    • Rod

      I was thinking the other day, is anyone out there adding up the economic cost of all those “Natural” disasters we see every day that one could fairly confidently put down to Climate change.

      We have always had bushfires, floods, sea surges etc. but they seem to be getting more frequent and ferocious. I’m sure insurance companies have an idea. Maybe they need political lobbyists.

      Any economist worth his salt will tell you the cheapest way to reduce emissions is a price on carbon. You would think a conservative government would be all for cost reduction!

      • Island fisher

        Yea but carbon pricing doesn’t hand out taxpayers money to the financial backers under the guise of direct action

      • nakedChimp

        They have an idea and are changing the small print and don’t insure at areas they think will actually cause insurance payouts 😉
        Try to get a cyclone insurance in FNQ or a submerge protection if you’re anywhere near a river or creek.

      • Alastair Leith

        Economists worth their salt might all back pricing carbon but some environmentalists favour more direct approaches. The political capital required to defend a pure CT devalues it and ETSs are fraught with compliance, verification, gaming, international parity and other problems.

        Stern did some work on pricing the cost of CC for UK Blair govt but has since said IIRC that the work was incredibly conservative.

  • howardpatr

    The ARENA matter will really throw the spotlight on Labor. Is Labor just smoke and mirrors on renewable energy?

    We will soon find out.

  • Robin_Harrison

    ‘Business as usual’ owns both sides of our political system. No-one can reach any level of influence without being owned or seriously manipulated by them.
    Our political system is, almost totally, dedicated to obstructing our transition to a sustainable future.
    Fortunately, our politicians, bless their lying little hearts, seem to be irrelevant. Sustainable practice makes far better economic sense and the lowering cost of renewables driving coal to the wall is our first, huge, public example of that.
    Much more to come and faster than people think.

    • Alastair Leith

      ARENA gives our scientists and engineers and project developers a great chance to play a role and lead the world. Without it we risk becoming an even greater technology importer than we are and corporate branch office economy. Most of the solarPV we import from China was UNSW IP that was poorly protected and they make relatively little from it. Had ARENA existed at the time we may have developed it locally first then licensed the manufacturing rights.

      As for faster than people think, Australia and Antartica are the only two continents without large scale CST with thermal storage.

      • Robin_Harrison

        Of course it would be better if our political system wasn’t owned by ‘business as usual’, far better if we prized our home grown talents and technology. However, home grown or imported, renewable energy tech is getting cheaper by the day and is being adopted. Globally renewables have reached price parity with coal bankrupting that industry, way sooner than anyone imagined. The continuing price reductions predict the same fate for gas, nuclear and oil, which has other problems.
        The current pattern of battery tech improvement and cost reduction predict EV price and convenience parity with comparable ICEV by 2025. Given the massive difference in maintenance and running costs nobody will buy internal combustion engine vehicles by then.
        I suspect that’s a lot faster than people think.

  • Brunel

    But why did the Greens not demand an end to negative gearing subsidies and demand that 457 visas be cut by 99%.

    Why not do something positive for the people that voted for ALP/Greens in 2010.

    A$23/ton was a tad too much for Aussies given that in EU in Dec 2010 it was A$16.50/ton and thus you lost the 2013 election.

    • Alastair Leith

      The Greens got a lot out of policy wins supporting Gillard minority government. Maybe the list was already too long to get negative gearing on it. Was a policy then but less of a high priority for MPs at the time perhaps.

      • Brunel

        They lost the 2013 election. So they should have done something positive for the people that voted for them (including me).

        They could have built housing for the homeless at minimal cost.

        They should not have given out too many 457 visas.