Funding cuts to ARENA confirmed, $435m gone

The Tony Abbott government has confirmed that it will slash funding from the Australian Renewable Energy Agency, completing a clean sweep of climate change and clean energy institutions and initiatives removed or significantly downgraded by the new conservative government.

Confirming RenewEconomy’s story last week foreshadowing the cuts, the government said it will cut funding to the $3 billion agency by $435 million. A bill to defer a further $370 million to nearly a decade hence, previously flagged by the Labor government, is also enacted in proposed new legislation.

ARENA says the funding cuts will not impact the current or next year’s programs, or projects already signed, but will likely impact on future years.

The renewables industry is concerned that major projects will likely be cancelled as a result of this move – particularly in new solar developments, and possibly the hybrid-renewables program that will focus on remote and off-grid locations, and bringing renewables to mining projects – all of whom pay ridiculously high prices for imported fossil fuels.

Australian Solar Council chief  executive John Grimes said the work that ARENA does is an excellent example of direct action.

“ARENA has played a critical role in supporting world leading solar research and development and ARENA funding support has allowed Australia to remain at the cutting edge of solar innovation. We continue to see world beating solar breakthroughs coming from our highly skilled solar researchers.

“This independent agency, with its annual funding prescribed in legislation, backs practical programs. This is about real action in the real world.”

Industry Minister Ian Macfarlane said the government remained committed to the agency and improving the competitiveness of renewable energy in Australia.

‘‘It has also been clear about its intention to achieve savings from programs associated with the carbon tax,’’ he said in a statement. ‘‘ARENA will have over $2.5 billion in funds to manage, which represents a significant investment in renewable energy sources to 2022. The agency board will determine how it will offer its programs.’’