Australia: Angry head of renewable energy agency says axing will leave energy sector obsolete

by Peter Hannam, Environment Editor, The Sydney Morning Herald, May 14, 2014

A second wind for renewables if axe falls on ARENA? Photo: Graham Tidy

The head of Australia’s flagship clean energy development agency says the organisation’s planned axing is a broken promise that will leave the country’s energy sector obsolete.

The Australian Renewable Agency chairman, Greg Bourne, blasted the decision in Tuesday’s budget to rip $1.3 billion out of the agency and reduce it to ‘‘a branch of an agency in the Department of Industry’’ with a ‘‘token amount’’ of funds.

ARENA ‘‘had always been supported (by the Coalition) all the way through, before the election, during the election, after the election," Mr Bourne told Fairfax Media.

The sky's the limit for renewable energy, proponents say.

The agency, which issues grants to emerging technologies such as concentrated solar energy, faces uncertain funding for 2014-15, with the $436.64 million that is available currently falling to about $331 million if the government’s bill scrapping the carbon price gets through the Senate. 

Massive cuts follow in the next financial year, with the agency receiving just $15 million in 2015-16 and 2016-17. 

Mr Bourne earlier this week described the government as “clearing the decks” of its support for renewable energy. Along with ARENA’s demise, the government is trying to eliminate the Clean Energy Finance Corporation (CEFC) and has appointed a climate change sceptic, Dick Warburton, to oversee the review of the Renewable Energy Target – a process most in the industry expect will see the goal weakened.

ARENA will continue to assess funding applications and disperse grants until it is formally repealed. The agency’s predicament is similar to the CEFC – which the Coalition publicly vowed to scrap before the election – with loans still being offered until its repeal act gets passed by the Senate.

It’s understood ARENA’s board is unlikely to be re-appointed when its term ends in mid-July, with responsibility for funding expected to be transferred to the secretary of the Industry Department.

“The Coalition government acknowledges the role of renewable energy in Australia’s energy mix," said Industry Minister Ian Macfarlane.

"There is over $1 billion in funding for existing renewable projects to be completed over the coming years," he said. "Given the tight fiscal environment as a result of Labor’s legacy of debt and deficit, the government considers there is a very significant investment in renewable energy."

'Very pissed off''

Greens leader Christine Milne described the plan to cut ARENA as ‘‘a very retrograde step.’. The move also coincided with the apparent ‘‘abandonment’’ of the government's $500 million “Million Solar Roofs” program to bring solar photovoltaic panels or hot water systems to a million low-income homes program. The combination would ensure ‘‘the loss of any cutting-edge science in renewable energy’’ in Australia, Senator Milne said.

‘‘Scrapping ARENA and the (CEFC) sends Australia backwards in clean energy development,’’ Labor’s climate change spokesman Mark Butler said in a statement.

‘‘This budget takes the Abbott government’s assault on the environment and climate to a new level, and shows a disdain for science and research that threatens decades of investment and innovation.’’

ARENA’s Mr Bourne said he was ‘‘very pissed off’’ by government claims his agency and others were beneficiaries of ‘‘corporate welfare,’’ noting the government's plan for a $20-billion Medical Research Future Fund to encourage advancement in that sector.

Clean energy, along with medical and other medical breakthroughs belong in a ‘‘realm where the government actually begins to help ‘sun-risers’ rather than ‘sunset’ industries,’’ Mr Bourne said.

‘‘It’s clearly a political decision which allows you to hypothecate $7 from a GP visit into medical research,’’ he said, referring to the new medical research fund. ‘‘It’s a very fast way to line up your ledger.’’

Global efforts to halt climate change will eventually mean Australia has to move to a less carbon-intensive energy sector, Mr Bourne said, adding that the closure of ARENA would send talent, jobs and investments overseas, making such a shift much more costly.

‘‘We may well find we are locking ourselves in to a carbon-intensive future in which we have no way getting out,’’ Mr Bourne said.

http://www.smh.com.au/business/federal-budget/angry-head-of-renewable-energy-agency-says-axing-will-leave-energy-sector-obsolete-20140514-zrcc5.html