News | 15th May, 2013

Renewable energy projects lose in budget

15 May 2013
JENNIFER MACEY: The Australian Renewable Energy Agency (ARENA) was set up one year ago and has just appointed a CEO and a board. And already the body, which is designed to be independent of government has had $370 million of funding delayed until 2020. 

The Australian Conservation Foundation's climate change manager Tony Mohr says the funding has been pushed into la la land.

TONY MOHR: And unfortunately that is a worry for us because budget funding four years out is going to be subject to a lot of changes, we have an election between now and then, and we're worried that pushing the funding back may mean that it just never comes into play.

JENNIFER MACEY: The agency is designed to help fund pilot projects of the most cutting-edge renewable energy.

TONY MOHR: ARENA was really looking at the bleeding edge of renewable energy technologies, so things like creating power from waves or creating power from different forms of biofuel that aren't even around yet. So it's really at the cutting edge of ideas and making those ideas get into the real world. 

Look certainly we would rather have seen the arena funding left as it was. We've got a whole range of different technologies and we need them to get into the marketplace as quickly as possible so really we would have liked to see more money going to ARENA rather than less. 

JENNIFER MACEY: The Clean Energy Council which represents the renewable industry sector says this budget doesn't send a good message to investors. The council's policy director is Russell Marsh.

RUSSELL MARSH: That was the whole point of ARENA, one of the reasons it was set up in the way it was, was to be to a large extent independent of government and when the Government made the statements when it was set up it was effectively to move ARENA away from the annual changes to budget numbers, nd you know, clearly as a result of the changes last night that hasn't happened.

And, I think the important point to make is not so much about the amount of money, its more the fact that there is constant chopping and changing by governments of the funding that's available. So if you're business is looking to invest in clean energy in Australia, it becomes very difficult for you to get any sense of what the policy framework, what support is available for you from one year to the next.

JENNIFER MACEY: Meanwhile, the Clean Energy Finance Corporation which helps makes large-scale renewable energy projects commercially viable has held onto its $10 billion in this year's budget. 

But Russell Marsh from the Clean Energy Council says this body may not be safe if the government changes in the next election. 

RUSSELL MARSH: There are some concerns about the future of the Clean Energy Finance Corporation particularly, the Coalition have made it very clear that if they win the election that's one of the bodies they would look to remove. 

The Coalition have said they still support ARENA so at the moment it's kind of seen that ARENA is the body that at the moment looks to have a longer-term certainty. But again say the constant tweaking of its funding parameters by Government just doesn't help. 

JENNIFER MACEY: Environment groups are also disappointed that $225 million to help protect biodiversity from the impacts of climate change has also been deferred. 

But they have welcomed moves to cut $274 million in carbon tax compensation for the coal industry, and $662 million worth of uncommitted funds for research into low-emissions coal and carbon capture and storage. 

Mark Wakeham is the campaigns director of Environment Victoria.

MARK WAKEHAM: Well from our perspective carbon capture and storage is a hypothetical proposition that may or may not exist many years into the future and is very unlikely to be economically viable. 

So pouring taxpayers' funds into it, particularly when the industry is not putting its own money into carbon capture and storage projects, is a poor idea. So yes we'd welcome those funding cuts and we think there's more important things for public money to be spent on.

JENNIFER MACEY: But he says the Government has missed an opportunity in this year's budget to cut more subsidies in the mining sector. 

MARK WAKEHAM: It's really surprising that the Government didn't take the opportunity to cut this $2 billion subsidy for the mining industry particularly given the failure of the mining tax to raise the expected revenue. 

And I think most Australians would be surprised and disappointed to find that they're paying 32 cents per litre of the mining industry's diesel bills.

PETER LLOYD: That's Mark Wakeham from Environment Victoria ending that report by Jennifer Macey.
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