Labor abandons ARENA, blames NGO media releases | RenewEconomy

Labor abandons ARENA, blames NGO media releases

Butler confirms $1 billion ARENA funding to be cut after advocacy groups failed to defend agency when Coalition announced changes to clean energy finance. Because of that, Labor will no longer put its “body on the line” to defend the agency it created.


Labor’s environment and climate change spokesman Mark Butler on Tuesday confirmed that a Labor government will not reinstate $1 billion in funding for the Australian Renewable Energy Agency, which has underpinned much of Australian investment in solar farms and battery storage and R&D over the past few years.

In the Senate this week, Labor sided with the Coalition to defeat a motion by the Greens to protect the funding of ARENA out to 2022 – effectively signalling the demise of an agency it helped to create a few years ago.

Labor announced last week in its climate and clean energy policy package that it would allocate $206 million to an ARENA funding round for large-scale solar thermal, and nearly $100 million for community energy.

But it left open the fate of the rest of the $1.3 billion of unallocated but legislated funding for ARENA, an agency it created as part of the Clean Energy Future package in 2012.

moree solar pic 2

Butler on Tuesday confirmed the ARENA funding would be dropped, saying Labor saw no point in continuing to “put its body” on the line to defend the agency, when environmental and renewable energy advocacy groups had failed to object when the funding was pulled by the Coalition government in late March.

“I have to stay, having stuck our body between the government and ARENA and the CEFC for the last two and a half years, the response by and large, with a couple of exceptions, was to welcome that … in some cases very enthusiastically,” Butler said in a response to a question from RenewEconomy at a Melbourne conference.

“The one day you can talk to the prime minister about his views on financing for renewable energy technology, people stand up and applaud. Those things have obvious consequences in terms of the Opposition’s, and of the community’s views on these things.”

Indeed, most environmental and renewable energy advocacy groups welcomed the announcement by the Coalition government when it said it would no longer seek to dismantle the Clean Energy Finance Corp, and announced a new Clean Energy Innovation Fund that would be assigned $1 billion of CEFC money.

They even fell for the spin that both agencies had been “saved” by the Coalition, as most in the media did too.

At the time, RenewEconomy – astonished by the response – asked many of those groups if they had actually bothered to read to the end of the government press release, which said that the Coalition would effectively scupper ARENA, strip it of $1.3 billion, remove its grants-based mechanism and relegate it to a role of “advising” CEFC on equity investments and loans.

As we wrote at the time, the hyped-up “retention of ARENA” was nothing of the sort. It was a sleight of hand. Prime minister Malcolm Turnbull had effectively given, or rather shuffled, with one hand, and taken with another

The Australian Solar Council had picked up on this. Others said it was too important to welcome the retention of the CEFC. By the time they and others voiced their concern about the fate of ARENA in the following days, it was all too late.

“So, frankly, we listened to that,” Butler said. “People thought that was a great idea. Some came back and called on me to welcome it as well and then  do something additional, which frankly is not how this system works. It’s not how politics works.

“We have our own challenges, in putting together budgets for school funding and other things … people welcomed the clean energy innovation fund, so we welcomed it.”

Butler said that Labor will provide a competitive and targeted round of concentrated solar thermal funding and more money for community power programs, but that will be it.

ARENA, it should be noted, has been responsible for the construction of the three biggest solar farms in Australia – Nyngan, Broken Hill and Moree, as well as the Carnegie wave energy project, and numerous other projects that featured solar and storage, and studies into new technologies, software and business models.

Along with the ACT government’s reverse auctions to support its own 100 per cent renewable energy target, ARENA has underpinned the industry in recent years – from university research, to the rolling out of new technologies, the testing of new business models and ideas, and the financing of large projects.

There are fears that the removal of ARENA funding and its grant-making abilities to leave a significant part of so called “innovation chain” without access to funds. The size and scale of ARENA grant making was often questioned, but many of these projects are too early stage for the equity or loan investments envisaged by the CEIF.

Labor’s decision to stop defending ARENA means there is nothing left to stop legislation being passed to confirm that $1 billion of funding will be removed – to the horror of the Greens, and the renewable energy industry and developers of new technologies.

It could be that Labor is using this as an excuse and is putting ARENA into the too hard basket. It stinks of political expedience. The NGO said the decision not to reinstate the funding was “deeply troubling” and added that “this is a terrible move that is out of touch with Australians deep support for renewable energy.”

Professor John Hewson, a former Liberal leader, described the abandonment of ARENA as an “absolute tragedy.”

Australian Solar Council chief John Grimes told the Energy Storage Conference in Melbourne on Wednesday that the federal government had “taken a backwards step” in defunding ARENA, and not making the Agency’s competitive grants available any more.

“So they’ll only invest (in clean energy technology) on an equity or …a loan basis, which means that any money that’s given from the government has to be repaid with interest, and there has to be strong independent commercial case… and a risk mitigation.

“A lot of the blue sky research, the first research we might see out of somewhere like the CSIRO… you can’t make a commercial case to say, well lend me $1.5 million I’ll pay you back $2 million in three years (or) five years time.

“It just doesn’t work that way,” he said.

“The opportunities for manufacturing a diverse range of technologies here is very real,” Grimes told the conference.

“There are some great innovations and manufacturing that (are) actually happening here in Australia. …And we’re kind of ringing the bell for government to say, let’s not lose the opportunity to support this strategic sector, like we lost the opportunity to that for solar, where the value of that manufacturing initiative was reaped by other countries, (but) wasn’t reaped by Australia.”

Another NGO said it was bizarre that Labor had abandoned the policy based on a collection of “luke-warm” press releases. It said the retention of the $10 billion was worth celebrating. “It says something about the way that policy is formulated in Australia,” the NGO representative said.

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  1. Brunel 5 years ago

    Solar panels are now dirt cheap – as we saw with the latest Dubai auctions.

    What we need is an independent lab – perhaps government funded – to cycle batteries to death to determine how many cycles they can do.

    Powerwalls, RedFlow, LG, Samsung, etc.

    We crash test cars, why not test the cycle life of batteries.

    • john 5 years ago

      There are already laboratories that certify battery performance.

    • solarguy 5 years ago

      Their dirt cheap if your happy with panels that are made from cells from the seconds or thirds bin.

      • Brunel 5 years ago

        You are against solar PV.

        • solarguy 5 years ago

          I’m a CEC accredited PV system designer and installer and after being in business for 8 yrs, I can truly say, dirt cheap panels aren’t cheap they, fail!
          Let’s see if get my meaning.

          • Brunel 5 years ago

            But you favour solar hot water over solar PV.

          • solarguy 5 years ago

            Look, I’m a realist. It’s not about favouring one technology over the other, it’s about what works best and in a cost effective manner.
            I’m not saying that H/Pumps can’t be powered by PV, it’s just a fact that you need more PV than you think. For instance a 1kw compressor will need approx, 1.5kw of PV due to losses and on days of lower than optimum insolation, just won’t contribute as much energy to heating water, as a solar thermal collector can, as solar thermal relies on infra red more than ultra violet radiation. Infra red gets through the clouds better and PV isn’t turned on to much by that part of the spectrum.

            The compressor will then need to get the shortfall from the grid as much as 90+ % more, depending on the day. 1.5kw of PV will take up more roof area as well.

            And here is a tip on H/Pumps they are set to go no higher in temperature than 60 degrees, in order to save energy. SHW on the other hand can max out at 80, all free from the sun, meaning you have a greater quantity of hot water for a given size tank. I’ve found with my Edson Evacuated Tube SHW system, if it starts off at max temp at days end, it will last the family 3 days before any need to boost, on shit days, where a H/P will suck down the expensive grid juice every day of the year. Ouch!

            This leaves my 6.7kw PV to power important stuff like my a/c’s and other loads. I only part with about $10 p.a. boosting the sucker, where a H/P can cost $1/day in summer, double in winter.
            So, do you still believe in Santa Claus?

    • Andrew Thaler 5 years ago

      we have a battery test lab at the CSIRO energy centre in newcastle.. it plans to do this.

      • Brunel 5 years ago

        Too bad they never did that for AA batteries – which are much cheaper.

  2. Chris Fraser 5 years ago

    My compassion for those saddled with developing the RE technological edge. I’m sure their role as innovators is hard enough without having to shell out for lobbyists. It isn’t fair. In regard to future development, no political party should get the benefit of any doubt when it comes to Arena support. They should have to prove, on the evidence, that a legislated policy should be dropped by a parliament.

    • Alastair Leith 5 years ago

      Evidenced based policy making, now there’s a thing. Here’s a game called Eco that hopes to teach this to the future decision makers while they are still honest and open to learning.

    • nakedChimp 5 years ago

      You’d have to take monopolies-in-private-hands out of the system for this to stick..

      • Alastair Leith 5 years ago

        quite right. Eco has an open ended governance layer where groups in the same server instance of Eco (same simulation or senario of the game) can decide how they want to make decisions and enact laws. environmental consequences pretty immediately effect most of the participants. so killing off crony capitalism would be a realistic proposition in that narrative structure. in fact it possibly wouldn’t even come about unless it was predetermined in the initial conditions. I’ll mention it to the developers, good point!

    • Andrew Thaler 5 years ago

      we have a political system of ideology these days.. not one by the evidence.

      • Chris Fraser 5 years ago

        Yes, and the lobbying seems to be more effective when there is a specific outcome with immediate effect for interest groups or even individuals. There seems to be rather few voices (outside of these blogs, of course) speaking up for our collective future, and that’s something I struggle with.

  3. MaxG 5 years ago

    Why the ALP is unelectable! They have no spine to defend their own doing!

    • JeffJL 5 years ago

      So, nothing to do with the MSM and their shock jocks.

      If the MSM were more honest in their reporting then the parties could put what they believe in not what will win them an election.

      You have a choice at the next election LNP or Labor. Which one do you want? By not singling out the LNP you are promoting them.

      It is all well and good to say vote for the Greens but even with the balance of power in the Senate they will not be able to achieve any improvements in the climate if the LNP are returned.

      Apologies. I think I am upset after the budget.

      • MaxG 5 years ago

        Why being upset about the budget. This is neoliberalism, what the LNP stands for. Complaining about the budget hole; Austerity for the masses; cut services; and reward the well off with tax relief. How more cycnical can it get.
        BTW: change is required and my vote goes green… as I can no longer support the Alternative Liberal Party (ALP).

        • solarguy 5 years ago

          Max, go and vote green, it’s better than a kick in the tits. But at least give Labor your second preference.

        • JeffJL 5 years ago

          I hate to say it, but as Solarguy says. Vote Greens but preference Labor over the LNP.

          Remember to remove the LNP Labor have to take votes from them, not the Greens.

      • John McKeon 5 years ago

        Jeff says: “You have a choice at the next election LNP or Labor.”

        … and I can’t see the Labor party pushing for electoral reform towards real proportional representation …

        I can tell you, Jeff, some of us are getting pretty pissed off with the limitations of the “two party” system.

        • solarguy 5 years ago

          But it’s wise to choose the lesser of two evils.

          • Andrew Thaler 5 years ago

            but voting for the ‘least-worst’ party is why we have such shite governments these past years. it is not a sustainable way to vote.

          • solarguy 5 years ago

            So what’s the alternative Andrew, Clive Palmer, Pauline Hanson or Mickey Mouse. What’s your pick?

        • Chris Fraser 5 years ago

          I’m annoyed too. Two-party parliaments make us too much like America with their diametrically opposed views and cultural divide. We need political diversity.

        • Alastair Leith 5 years ago

          at least youth vote is bleeding to the Greens. electoral reform will have to surface for the ALP the same way negative gearing surfaced many years after Greens set a policy around grandfathering it. they are scared of losing finance so they need to be more scared of it making them look (and behave) like the conservative anti-environmental establishment those dollars come from.

        • JeffJL 5 years ago

          Be annoyed as much as you want, it doesn’t change the facts on the ground. We have a largely two party system. Sure agitate for a change

          but don’t sit outside and let those on the inside change Australia in a way you don’t like. Not putting the LNP below Labor will do that.

          I like our system of government with seats in the Reps and representation in the Senate. If I could change one thing it would be a way to get more ordinary people into the Senate rather than politicians.

      • Alastair Leith 5 years ago

        holding part of the balance of power in lower house and upper under Gillard/Rudd and ALP youth vote bleeding to the Greens make Greens influential over ALP to some extent if ALP win. the more votes go green the more ALP will commit on climate and environment before elections rather than after. before is better. .

      • Andrew Thaler 5 years ago

        that is patently false. our choice is manifestly larger than labor or LNP.

        • solarguy 5 years ago

          Better start a new party then!

        • JeffJL 5 years ago

          Yes there are other parties out there but there is no hope (Trump and Leicester apart) of a third party forming government at the next election. Thus when you vote you can vote for a third party but in the end the way Australia distributes their preferences will decide if the LNP or Labor govern. That is why I say the choice is between them.

    • Justin Mahon 5 years ago

      No. They are unelectable because they loose the politics when their supporters flee into the bushes when it matters. Labor can find Gonski now – something that will win votes. The sector will need to develop a political strategy – it can’t bank on either popular support or bipartisanship. Make choices. Pick a side.

  4. lin 5 years ago

    Extremely disappointing for Labor to do this. They really need to grow a pair and learn to do the right thing because it is the right thing to do for a change. It is called Leadership.

    • JeffJL 5 years ago

      Labor need to do the things they need to do to get into power. If they don’t you will be lumbered with another three years of the climate deniers in the LNP. Feeling smug and superior is worthless if you get the LNP back for another term.

      • lin 5 years ago

        This sounds like a “we had to destroy the village to save it” type argument. If Labor are not going to be different to the Libs, why should I vote for them? There are other people to vote for that say they will do something.

        • solarguy 5 years ago

          And you don’t think Labor isn’t going to do something better re, RE.
          Jeff has a very valid point. For all we know, if Labor wins, they may just reinvent ARENA. Unfortunately, that’s what has to be done these days, to throw the hound off the scent, in matter of speaking.
          Keep this in mind, a hell of a lot of voters are swingers, that can be persuaded either way, look at Abbott’s con on such people and the result.

          • lin 5 years ago

            Personally, I am hoping for a hung parliament, with Labor in a minority position, and enough good independents and minor parties to push them into doing the right thing. Worked pretty well last time. Gillard’s was one of the best governments ever.

          • David Boxall 5 years ago

            Me, I’m dreaming of a hanged parliament. 😉

          • Justin Mahon 5 years ago

            Leister City will win the Premier League again before that happens.

          • JeffJL 5 years ago

            Donald Trump to become the GOP presidential candidate? Good/Bad things come in three Justin. 🙂

          • solarguy 5 years ago

            I agree she got a lot done.

        • Justin Mahon 5 years ago

          No, it’s a join us in saving the village we can’t do it alone strategy. It’s not that complicated.

          • lin 5 years ago

            “Mark Butler on Tuesday confirmed that a Labor government will not reinstate $1 billion in funding for the Australian Renewable Energy Agency”.
            Are you saying that this is a lie, and that we should trust Labor to go back on its word to defund ARENA if elected? Colour me confused, but I think it will be more straightforward vote for someone who says they will support ARENA.

          • Justin Mahon 5 years ago

            To be clear, no. It is NOT a lie. The Opposition have already ‘spent’ the funding given the politics of this were so very easy. It’s gone. ARENA is dead. If it ever exists again in any form it will have found its way to the top of a Labor government’s priorities relative to other policy issues or measures. This was an absolute ‘no brainer’ in the political and budgetary context.

            What fools the industry are. No wonder they get eaten alive by conservatives, they can’t even read the Budget papers, policy announcements, develop a political strategy and execute it. They scatter like cats hoping for ‘crumbs from the table’.

            When government’s go strategically Keynesian in this way their policies are always very vulnerable to changes of government, economic cycles and the deadly combination of the two. Suporters must be unequivocal. Value this form of government intervention and fight for it. In other industries they do this well.

            The industry has been set back decades by the change of government and its response essentially boils down to “politics is bad”. Well, ive got news for you – politics ain’t going anywhere so it’s time to grow up.

          • lin 5 years ago

            Interesting perspective, and it sounds like you know what you are talking about. However, this sort of politics does my head in. I just want a government who will listen to what the relevant experts say, and prioritise how best to spend our hard earned cash to create the best environment and society we can. Too much of what happens now revolves around selling us out for power and profit.

          • Justin Mahon 5 years ago

            “I just want a government who will…”. Anybody can finish that sentence and very few will finish it the way you did. Even those that do will have a different view about how to get there. With such complexity and diversity the only rational response (in a democracy anyway) is to hedge. In political terms that means build a coalition, compromise and get most of what the most of you want. In OUR system on issues of the environment and its sustainability, this means electing a Labor government, understanding it’s political and economic constraints and making trade offs in the short term for a return in the long run. We get this idea intuitively in sustainability economics – however we fail to apply it to the ‘political marketplace’. If you do, you start to see the wood from the trees. It does however take a certain discipline and the ability to accept that compromise is itself inherently valuable. That is too difficult for most people in my experiance – so here we are….

          • solarguy 5 years ago

            I like a bloke who is switched on, you have worked out this little chess game. Good for you.

          • Cooma Doug 5 years ago

            The rise of Donald Trump was on the back of the failure of smoke and mirrors. All be it, achieved by using smoke and mirrors.
            The trickle up effect of 35 years run out of steam. Perhaps that is the horse he rides.

          • solarguy 5 years ago

            That’s right it’s up to us.

          • JeffJL 5 years ago

            I don’t agree with you final sentence. A bit more respect would not have drawn attention away from your well reasoned argument.

        • JeffJL 5 years ago

          Straw man argument there lin.

          I disagree with you that Labor are the same as the LNP. They may not have policies that go far enough in your opinion but I suspect they are closer than those of the LNP.

          Based on poling either the LNP or Labor are going to form the next government. I don’t say vote Labor 1, I just say preference Labor over the LNP.

      • solarguy 5 years ago

        Well said Jeff, bravo!

      • Alastair Leith 5 years ago

        so where did the smug badges that are being handed out by Labor come from? Maybe they got minted in house.

        • JeffJL 5 years ago

          Alistair. I thought about becoming a member of Labor, but I cannot. I am a swinging voter. I will vote for the party/candidates whom I believe will produce an Australia I am proud of.

          Not proud, no disgusted,at what the LNP are doing.
          Not proud of all the things the Greens are doing (voted for them at the last federal election).
          Not happy with all the things Labor are doing.

          Labor have the best chance of creating an Australia I would be prouder of.

    • Alastair Leith 5 years ago

      Keating talked about the right thing to do, but at the same time reformed ALP into having a neo-liberal market basis for policy formulation. long term the effects on ALP have been disastrous. it’s basically
      about polling driven policy. at least the Libs have conviction politicians! (that was a joke just to be clear).

      • lin 5 years ago

        (I think what you mean is that the Libs have politicians who should be convicted!)

        • Alastair Leith 5 years ago

          you win!

  5. Zvyozdochka 5 years ago

    In fairness these are Greens ideas that the ALP fought tooth and nail to stop. People like Martin ‘Fossil’ Ferguson and friends.

    • JeffJL 5 years ago

      But they did bring them in.

  6. onesecond 5 years ago

    It is very easy, just vote Green.

    • JeffJL 5 years ago

      The Greens may hold the balance of power in the Senate but they do not make the decisions.

      Yes vote Greens if you chose to but put the LNP below Labor if you want something positive done about the environment.

    • solarguy 5 years ago

      And if they don’t get over line or at least are able to form a minority government with Labor, the dreams F4#kt. Another three yrs of LNP moronic stupidity should seal our fate!

    • Andrew Thaler 5 years ago

      these days the Greens ‘politic’ the environment… rather than use politics to save/help the environment.

      • solarguy 5 years ago

        That’s a very myopic statement!

  7. Eb 5 years ago
  8. Tim Buckley 5 years ago

    ARENA is a brilliant organisation designed and effective in fostering Australian energy sector innovation and technology development. Turnbull’s slogans about driving innovation ring hollow in the reality of funding cuts to ARENA.

    • Alastair Leith 5 years ago

      ring hollow is to put it too kindly.

      same for his mr internet title, hung around his neck like an albatross by Abbott.

      meanwhile a 19th century civilisation and environment destroying industry continues to receive taxpayer funds to support its disruption protection racquet. Turnbull is effectively a climate change denier, just like Abbott, just like Minister for Sophistry Greg Hunt.

  9. The Lismoron 5 years ago

    This is exactly what people mean when they call our parliament a duopoly!! Punish those who they consider to have transgressed. Don’t worry about the national interest. I will vote green now for sure…

    • Justin Mahon 5 years ago

      And you’ll get exactly what the Opposition spokesperson said you will. Well played ?

    • solarguy 5 years ago

      Just don’t make the mistake of giving LNP anything but last preference though!

  10. Colin Nicholson 5 years ago

    Sadly though Butler makes a good point. He could have gone further and noted the fragmented industry that renewables is. There is zero compromise in these industries. We saw this in 2010. Remember the ETS would have been passed but the greens wanted purity not reality and compromise and wouldn’t support it. That’s worked well hasn’t it

    • JeffJL 5 years ago

      And Rudd played politics with Turnbull. Probably only Turnbull came out clean from that fiasco.

    • Tomfoolery 5 years ago

      That ETS bill was an absolute sham

      • Chris Fraser 5 years ago

        Ah but far better than a renewables regime that was ‘absolute crap’.

  11. MaxG 5 years ago

    Typical Aussie culture: blame somebody else!
    What a lame mob! As I said: Alternative Liberal Party, useless.

    • Justin Mahon 5 years ago

      ARENA, RET, Carbon Tax, Solar rebates, innovation funds, Landcare, RFA’s and many, many, many more green policies from this “useless” party over the years. Life is about choices – at the moment the sector is learning that the hard way.

    • solarguy 5 years ago

      Max are you an Ozzie? and do see things just in black or white, or do see shades of grey too?

      • MaxG 5 years ago

        Yes, I am an Aussie… and can see shades of grey, colour too 🙂
        And also understand that there a re multiple ways to skin a cat.
        However, most things / issues / topics have underlying principles; e.g. the four pillars of democracy, with the one of them (the free press) demolished, the question arises, whether we still have a functioning democracy. When public assets are sold off by a government that has no mandate to do so; it raises fundamental questions… these “fundamentals” are not fixed by whining or half-baked ideas, either they are or they are not — hence, the black and white you may see in my viewpoints.

        • solarguy 5 years ago

          Yes, public asset sell off isn’t in my mantra either and have you noticed what their doing (LNP)in NSW with the power sell off.
          I don’t know why you would vote away from Labor because the press is right wing LNP controlled.
          Anyway I’m happy you are voting Greens, just put ALP second preference. Hell, I know your a thinking man, it’s just a request.

  12. Justin Mahon 5 years ago

    The industry is politically ignorant and paid the price. It’s a simple as that. Gonski needs funding and a range of other key social programs in health and beyond, all while revenue has been gutted by conservatives and the ‘left’ cower in the corner instead of fighting for ARENA as they should have. What competent buffoons. For the ALP to achieve ANYTHING it must win an election. It tries to do this on a green platform that includes ARENA and the sector goes AWOL.

  13. Jimbo 5 years ago

    ARENA is gone just like the price on carbon we once had. They went with Rupert Murdoch’s blessing on the Liberals. Labor could have done nothing to prevent that as the LNP boast that they were great achievements and the mainstream media backs that all the way.

    • solarguy 5 years ago

      Ah yes the all too powerful right wing media. Weak heads are their favourite prey!

  14. Rob 5 years ago

    Bad move Labor. Could come back to bite you at the election.

    • JeffJL 5 years ago

      Ah yes. I can just see it. All the people complaining will go to the LNP.

      It was a political decision. Labor and the Greens set it up. Let us see what they come up with to replace it. Or we could have more Direct Action and Greg Hunt.

  15. Liz Hanna 5 years ago

    Shame Labor Shame. Vote loosing words, beliefs & actions

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