Taylor to force clean energy funds to back gas and carbon capture | RenewEconomy

Taylor to force clean energy funds to back gas and carbon capture

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A leaked draft of the Morrison government’s ‘technology investment roadmap’ suggests it will open up clean energy funding to fossil fuel projects.

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The Morrison government is set to double down on plans to direct taxpayer funds into unproven carbon capture and storage projects, as well as new gas investments, in what the government describes as a ‘technology-neutral’ approach to energy policy.

As reported by the Sydney Morning Herald, a leaked draft of the Morrison government’s Technology Investment Roadmap confirms that it is looking to redirect funding earmarked for clean energy projects into support for gas and carbon capture and storage projects.

The move by the Morrison government was first flagged in May, and it seems it will now move to remove legislated limits placed on both the Clean Energy Finance Corporation and the Australian Renewable Energy Agency that currently require the two bodies to focus their investments in clean energy projects.

Both agencies were established under the Gillard government and survived numerous attempts by subsequent Coalition governments to abolish them. Having failed to strip the agencies of funding, the Morrison government looks set to try and repurpose the funds for investments in fossil fuel projects.

The Clean Energy Council said that the move to direct funds into gas or carbon capture projects would undermine investor confidence in the clean energy sector, with investors showing a clear preference for lower cost wind, solar and storage projects.

“Investors in the Australian energy sector have made it clear that they see renewable energy and energy storage as the priority for the future of the Australian energy system,” the Clean Energy Council said in a statement on Monday.

“Timely and strong investment in renewable energy and energy storage will deliver the least-cost transition to a reliable and clean energy system as well as providing significant jobs in rural and regional Australia. That’s why we believe renewable energy and energy storage should be the centrepiece of Australia’s energy policymaking and COVID-19 economic recovery strategy.”

The revelations come as both the New South Wales and Queensland state government announce massive new funding commitments for renewable energy developments in the respective states, including a $500 million investment commitment from the Palaszczuk government to establish its own Renewable Energy Fund.

Federal energy and emissions reduction minister Angus Taylor published a discussion paper in May on the Technology Investment Roadmap, which sought feedback on the Morrison government’s proposed approach, which would see taxpayer funding used to prop up technologies that have delivered little in terms of greenhouse gas emissions reductions.

The proposed strategy has been criticised as effectively meaningless without ambitious long-term emissions targets, with the Morrison government seeking to promote a ‘ ‘technology investment target’ as an alternative to setting a more ambitious emissions reduction target beyond 2030.

Taylor has already introduced proposed amendments to parliament which would expand the remit of the Clean Energy Finance corporation to include potentially loss making gas projects, as part of the government’s Grid Reliability Fund.

The Morrison government is seeking to establish a $1 billion Grid Reliability Fund, to be managed by the Clean Energy Finance Corporation, which would fund commitments being made under the Underwriting New Generation Investments (UNGI) program, and other commitments being made as part of its ‘gas-led recovery’.

The move is set to be opposed by both the federal Labor opposition and the Australian Greens. While Labor energy spokesperson Mark Butler said that the opposition party supported the establishment of a Grid Reliability Fund, it would oppose the use of the Clean Energy Finance Corporation to prop up potentially loss-making gas projects.

Former CEFC chief executive Oliver Yates last week wrote that trying to force it to back gas investments would destroy the culture and the staff of the organisation. Former chair of ARENA, Greg Bourne, also added his own voice to the calls to keep the two agencies dedicated to clean energy investment.

“The Government’s move to change the remit of both the CEFC and ARENA shows how desperate it is to support the gas industry. Rather than focussing on past technologies, the Government should be driving for a cleaner future”,  member of the Climate Council and former ARENA chair Greg Bourne said.

“Only a renewables-led future makes economic sense. Propping up failing fossil fuels and commercially non-viable technologies like CCS is a waste of taxpayers’ money. Australia does not need any new polluting fossil fuels. Coal and gas are expensive, polluting and a poor public investment.”

The move has also been slammed by environmental groups as compromising a body that has successfully supported the emergence of a thriving clean energy sector in Australia.

“The CEFC and ARENA have been great Australian success stories, growing renewable energy in Australia and making returns for the taxpayer,” the Australian Conservation Foundation’s climate program manager Gavan McFadzean said.

“Energy Minister Angus Taylor is trying to force the CEFC to invest in gas, even though gas projects are risky investments and in many instances gas is as polluting as coal. Minister Taylor wants to change the definition of ‘low emissions technology’ in the CEFC’s investment mandate and instruct it to invest in gas, a fossil fuel made up mainly of methane.”

“These proposed changes would compromise the integrity and independence of the CEFC and ARENA, while giving a financial gift to the gas industry,” McFadzean added.

ARENA is approaching the end of its funding allocations and is now estimated to have less than $100 million in unallocated funding, out of a total funding pool of around $2 billion. ARENA has provided grant funding to support research and development of emerging renewable energy technologies, and the Morrison government has been called upon to extending the life and funding allocations to ARENA to enable its continued work.

While it now appears that the Morrison government is likely to allocate additional funding to ARENA under the federal budget to be handed down in October, that funding is going to come with a catch – that its funding remit will be widened to enable its funds to be channelled into fossil fuel projects.

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