Thursday, 15 December 2011
Labor's clean power play
A new national agency will be established to manage billions of dollars’ worth of clean energy projects across Australia, in a major concession by Labor to secure the Greens’ support for the carbon tax plan.
As part of the carbon pricing deal to be announced on Sunday, an Australian Renewable Energy Agency will take over responsibility for funding research, development and demonstration of new and existing clean energy projects.
The agency will be run by an independent board of investment, business and energy experts appointed by cabinet.
Existing programs to be dissolved into the agency will include the $1.5 billion solar flagships program, which was promised by Kevin Rudd with the 2009 budget as a plan to build ”the single-largest solar power station in the world”.
Nine other programs will fall under the agency’s control, including the Australian Solar Institute based at Newcastle and programs aimed at developing solar, biofuels, geothermal and ocean power.
In other developments ahead of Sunday’s announcement:
The agreement to remove climate grant schemes from government control follows criticism of their effectiveness in developing new technology and cutting greenhouse emissions.
The Greens claim a lack of consistency in funding decisions under consecutive governments has denied the industry the certainty needed to invest in new technologies.
Greens deputy leader Christine Milne said bringing the funding under an independent authority would ”finally deliver the consistent, systemic support the industry needs in order to challenge entrenched coal … [and] bring home many of our world leaders in renewable energy”. She said it would create tens of thousands of jobs.
Energy Minister Martin Ferguson defended the government’s record in supporting renewable power and ensuring value for money, pointing to $770 million in solar flagships grants announced last month to help build two large-scale solar plants in outback NSW and Queensland.
The agency, to be known as ARENA, will take over responsibility for $1.5 billion in funding that has already been earmarked for projects, and have $1.7 billion to spend as it sees fit by 2019-20.
Detail of extra funding for the agency has been promised on Sunday. It is understood it could include money generated by a second body – a multibillion-dollar clean energy financing corporation – backed by a mix of carbon tax revenue and private capital.
In a compromise between Labor and the Greens, it is understood the corporation will not fund ”clean coal” projects. But it will help finance hybrid plants fuelled by both renewables and fossil fuels, and emissions-free power stations.
The Department of Energy will today host a closed-door industry discussion on large-scale solar power, which is expected to be attended by over 200 people.
The discussion was demanded by the Greens in exchange for their support for the Queensland flood recovery package this year.
A background paper prepared by the department for the meeting says the cost of building and running large solar plants is falling, but is still much higher than fossil fuel sources such as coal and gas. The paper says the economic viability of large solar projects could be reduced through advances in storage technologies such as batteries.
Independent MP Rob Oakeshott backed the new agency. ”Geothermal, solar and hydro are all proving themselves up as real option for peak loads and increasingly for baseload. A finance scheme the size of ARENA will help Australia transition in a competitive way in regard our renewable strategy,” he said
Meanwhile, Victorian Energy Minister Michael O’Brien said the Baillieu government remained ”open” to a carbon price, but criticised the proposed tax, saying it would hamper the state’s ability to fund hospitals and new trains.
Mr O’Brien accused Canberra of preparing to take up to $450 from the pockets of every Victorian in extra tax, or $2.5 billion in total. The figures – based on economic modelling the state government is refusing to release – did not acknowledge any compensation, which Labor says will be given to nine out of 10 households.