Xenophon comes out in support of CEFC, solar households

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Xenophon says CEFC should be retained to deliver cheap abatement, and opposes tariff changes to existing solar households. But he doesn’t like Clive Palmer.

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Independent Senator Nick Xenophon has come out in favour of the Clean Energy Finance Corporation, possibly increasing the chances of the under-siege institution surviving government threats to dismantle it.

The new Coalition government has promised to dissolve the CEFC, which will have $10 billion of funds at its disposal, as part of its commitment to break apart the previous government’s climate and clean energy policy infrastructure.

Interestingly though, a bill to repeal the CEFC has yet to be presented, and there is hope that the government can be convinced to find a way to retain the institution in some form and save political face.

Xenophon, the most senior of eight independent Senators who will have a critical casting vote in the new Senate from next July, told a conference in Sydney on Wednesday that there was a strong case to keep the CEFC, and to lift the ambition of Australia’s emission reduction targets.

“I don’t think that the government should be throwing out the baby with the bathwater, if the CEFC can actually deliver lower cost abatement. And I think that is important,” he told the Eastern Australia Energy Markets Outlook conference.

That it is a message that the CEFC, as RenewEconomy has revealed, is pushing actively within government circles. It is suggesting that it is within the government’s ambit to extend the CEFC support for emerging renewables such as solar PV and solar thermal to more traditional industries and achieve cheap abatement.

So cheap, that it would not cost the government a single dollar, apart from administration costs, and could prove vital in the cash-strapped government’s attempts to achieve a 5 per cent target under Direct Action and its emissions reduction fund.

The government would certainly need such an addition if it came under pressure to increase the targets, as the CCA is likely to recommend it do, and the international community as well if climate talks progress smoothly.

“That (emissions reduction) goal should be significantly higher (than 5%),” Xenophon said.

While he supports the repeal of the existing carbon pricing regime, Xenophon said it was critical for Prime Minister Tony Abbott to make a “personal commitment” to have a “credible scheme.”

Xenophon still favours a “baseline and credit” scheme that he and Malcolm Turnbull unveiled in 2009 with the assistance of Frontier Economics. He also wants the renewable energy target reviewed in line with Direct Action.

While he rejects the “narrow” economic rationalist approach to abatement costs of the RET taken by the likes of the Productivity Commission, he wants to adopt the UK model of banding, or giving greater incentives to what he calls “baseload renewables” such as geothermal, solar thermal and ocean energy. In the UK, these technologies get multiple renewable energy certificates, and he likes the idea – even though it would likely increase the abatement cost.

Xenophon, although he represents South Australia, a state which sources around 27 per cent of its electricity from wind farms, says he is concerned about the impact of noise on residents. It’s a highly contentious position, particularly his alliance with the erratic and ideologically driven Senator John Madigan.

Xenophon flagged new research from the Environmental Protection Authority that is yet to be released about the measurement of wind turbine noise, and the potential of an issue if this exceeded background noise by more than 10 decibels.

Xenophon also said he wanted to address the issue of “gold plating” of Australia’s electricity networks, and the huge cost past-through to consumers. “If instances of excessive or premature spending are found—gold-plating of networks, if you like—then I think those owners should stop making windfall returns.”

However, he said he did not support changes to tariffs that would affect existing solar households, as has been canvassed by the Australian Energy Market Commission. He said existing households should have their tariffs “grandfathered”.

But he is not likely to be joining forces with Clive Palmer’s Palmer United Party, which will have a bloc of at least three people in the Senate.

“I remain optimistic that energy policy can deliver certainty to investors, price relief to consumers and environmental outcomes,” he said.

“I had the pleasure of meeting Clive Palmer five weeks ago, I rolled out that old line that Gareth Evans used on Bronwyn Bishop, which I’m very happy to repeat when it comes to Clive: Why did I take an instant dislike to Clive Palmer? Because it saves time.”

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2 Comments
  1. MrMauricio 5 years ago

    What about Julie Bishop Nick??Thank God for his breath of fresh air and common sense-a politician looking to the future-as rare as rocking horse sh*t!!

  2. Terry Mc 5 years ago

    Nick has a chance to write him self into Australian history here.
    The deployment of large-scale renewable energy is not only responsible energy policy it is also responsible environmental policy as well as responsible economic policy. The World Bank and the International energy agency said that most of the world’s fossil fuels will need to be left in the ground in order to avoid runaway climate change. This policy will stop carbon dioxide emissions, improve the future health of the Port Augusta, create jobs and bring economic activity to regional Australia. Regional towns like Port Augusta are crying out the jobs and the economic activity this plan will create
    1300 construction jobs over 6 years.
    360 ongoing operations and maintenance jobs in the town of Port Augusta and 225 manufacturing jobs in South Australia.
    With a clear leadership vacuum and irresponsible energy policy from the 2 main parties around issues like climate change and coal seam gas the deployment of large-scale renewable energy at Port Augusta takes Australia forward into a new era of employment, technology and responsible environmental policy. There are serval funding mechanism available to government to build Repower Port Augusta 6 billion dollar price tag. RPA has a 6 year time frame to roll out this new technology and is no threat to the fossil fuel industry or government royalties. Unfortunately this is going to take politician’s with vision and courage some thing we have very short supply of in Australia.

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