Investments from Australia’s $10 billion green bank have been stopped in relation to clean energy projects, with executives hoping to persuade the incoming Coalition government not to axe it as previously promised. It is hoped by leading business groups the Abbott government will immediately legislate to lower the carbon price to international rates if it faces parliamentary delays cancelling the scheme and putting in place its direct action plan.
The Clean Energy Finance Corporation hopes it can use impending talks to persuade senior Coalition figures its goals can be adapted to achieve the new government’s plans without changing legislation. The Coalition is determined to axe the bank in opposition. Coalition finance spokesman Andrew Robb said ministers would sit down with the corporation once confirmed.
The corporation has invested $560 million in projects such as the Moree Solar Farm and Taralga Wind Farm since July. It states its activity has encouraged an additional $1.6 billion in private investment towards clean energy projects.
Oliver Yates, the corporation’s chief executive said ”The corporation has approached the Coalition to engage in discussions about the transition and how the opportunities it has recognized can support the incoming government’s policy priorities under direct action.”
The bank believes its lending to date will save carbon dioxide abatement at the cost of minus $2.40 a tonne, ie returning funds while cutting emissions. And regardless of cost savings guaranteed by the Coalition, the CEFC says to scrap it would cost the government money from 2014-15, since its returns are required to surpass its cost of funds.
Among the current projects approved for CEFC support was $60 million in debt for the Moree Solar Farm. Finance was completed last week. At least 100 jobs will be created with the 56-megawatt solar photovoltaic power plant, to be built over 350 hectares in northern NSW. This power plant would not have gone ahead without the loan, said Lane Crockett, general manager of Pacific Hydro, one of the farm’s shareholders.
General manager Stephen Garner, of Keppel Prince Engineering, said approximately 70 jobs at the wind tower maker in Victoria had been saved by the CEFC’s loan of $37.5 million for the 51-turbine Taralga Wind Farm intended for a site north of Goulburn in NSW.
Rather than importing the company’s towers, the cheaper finance allowed the project to source them in Australia. “We just couldn’t survive any longer without securing that project,” Mr Garner said. He also said the incoming government should avoid scrapping the CEFC. “It not only saves money, it saves jobs.”
According to consultants Pitt & Sherry, renewable energy supplied to the national electricity market serving the eastern states and South Australia has more than doubled in the past five years. In August, the share of renewables to that market was 14.9 per cent.
The Clean Energy Council said last year industry invested $4.2 billion in renewable energy and energy-smart technologies. Some 24,300 people were employed in the industry at the start of the year. The Business Council of Australia and the Australian Industry Group said Parliament should respect the Coalition’s mandate for repealing the carbon tax.
But the council’s deputy CEO, Maria Tarrant, said if there was a parliamentary delay, the Coalition should initiate legislation to cut the cost business pays for each tonne of greenhouse gas it emits to about the international price – currently about $6 a tonne – while trying to put into practice direct action. The Coalition faces a tough time cutting the carbon price, with Labor and the Greens – who hold the balance of power in the Senate until July 1 next year – saying they will vote against the legislation. After June next year, the Coalition will need to deal with independents and minor parties.
Business was currently paying rates for carbon emissions well above the international prices, Ms Tarrant said. She said it was doubtful the price for the current financial year – $24.15 a tonne – could be lowered but she said legislation could be ready to reduce it after that, before the tax is repealed.