Federal energy minister Angus Taylor has told an online forum of state energy ministers that the Morrison government should be given greater credit for improving clean energy investor confidence, despite investors saying the federal government is one of its biggest challenges.
In a pre-recorded address broadcast on the forum hosted by the Clean Energy Council on Wednesday, Taylor again claimed that on a ‘per capita’ basis, that Australia was a “world leader” in renewable energy investment.
“Last year, Australia’s investment per person was greater than the US, Japan and the UK and more than three times that of Germany, China, France and Denmark. Claims that we are falling behind on our previous renewable records, ignores the impact of rooftop solar growth.”
But his remarks were quickly challenged by state energy ministers. Queensland’s Sr Anthony Lynham says the federal government had thrown a “wet blanket” over clean energy investment, which has fallen dramatically from its peak, and he was “distressed” that it had not taken up federal Labor’s offer of a bipartisan approach.
“You can see that the sector is willing to invest, but it requires investment confidence,” Lynham said. “Unless we have it at a national level, we won’t get that investment, despite the best efforts of the states. It takes a lot of impetus (from the states) … in the absence of concrete federal policy.”
Victoria energy minister Lily D’Ambrosio said she was hopeful that the new minister’s forum that will meet next Friday for the first time since the COAG format was ditched would produce a better outcome.
But she also chipped the federal government for its failure to move on legislation to allow offshore wind projects to move forward. South Australia’s Dan van Holst Pellekaan raised concerns about the future of the Australian Renewable Energy Agency, saying it was essential to support new renewable hydrogen projects.
The federal government has often claimed credit for the surge in investment in 2018, and 2019, the result of the renewable energy target it tried but failed to stop. And it’s claims of global leadership has been challenged by analysis from the think tank The Australia Institute which found that Australia lagged behind many other countries when assessed on various investment metrics.
“Despite the economic downturn triggered by COVID-19, the renewables industry has performed well. This is backed by the CEC’s own clean energy outlook which shows that in July 2020, despite the global pandemic, investment confidence is at its highest level since records began in 2018 at 7.3 out of 10,” Taylor said.
In claiming credit for the rising confidence, Taylor pointed to a range of measures, including the UNGI program, and the Grid Reliability Fund, neither of which have delivered any meaningful investments in the Australian energy sector. But neither of these programs have delivered any results, and have been specifically blamed by investors and regulators for curbing, rather than encouraging, new investment.
That recent investor confidence survey found that the Morrison government’s energy policies, or lack thereof, represented two of the top six challenges identified by clean energy businesses.
Responders to the investor confidence survey attributed their improved confidence in the clean energy sector to strong policies and targets being introduced at a state and territory level, such as the NSW government’s plans to establish a dedicated renewable energy zone which was overwhelmed with interest from project developers.
Unhelpful market interventions in the energy market ranked as the second most significant challenge to businesses, which may include the government’s interference in the proposed closure of the Liddell coal-fired power station, and the Underwriting New Generation Investments program, which has delivered no new projects more than 18 months after its original announcement.
Taylor added that the clean energy sector should be welcoming the Morrison government’s plan to establish a $1 billion Grid Reliability Fund, despite that fund also not being operational, and has delivered no funding to new projects.
“The government’s continuing to support new investment in the energy sector through mechanisms like the Underwriting New Generation Investments program, the $1 billion Grid Reliability Fund, Marinus link and through the delivery of Snowy 2.0. These investments and the Grid Reliability Fund in particular should be welcome news to [Clean Energy Council] members,” Taylor said.
The Grid Reliability Fund was announced in October 2019 and will be used to pay for the Morrison government’s commitments under the UNGI program, which was announced around the same time but has yet failed to deliver any concrete investments.
The legislative amendments required to establish the Grid Reliability Fund have yet to be introduced to parliament, and it may be some time before they are in force.
The fourth challenge identified by businesses as a barrier to the growth of Australia’s clean energy sector was a lack of integrated climate and energy policy at a federal level.
One responder to the Clean Energy Council investor confidence survey singled this out as an issue, saying that the lack of federal government policy meant that there was lack of direction for where investment was needed in the energy transformation.
This mirrors similar comments from Atlassian co-founder Mike Cannon-Brookes, who told a Beyond Zero Emissions event that without strong policies and targets, the Morrison government’s technology investment roadmap was a strategy that lacked direction.