Australia is bathed in sunlight like few other places on earth. It, among all countries, has the highest potential to generate all the electricity it needs from renewable sources, principally the sun and wind.
But the prime minister doesn’t care about clean, renewable energy in Australia. All he cares about is doing the bidding of the wealthy coal owners who bought and paid for his election win in 2013. Since he took office, Australia’s investment in clean energy projects has fallen 70%, according to Bloomberg New Energy Finance.
Government Says No to Solar Investment
Now Abbott has issued instructions to the Clean Energy Finance Corporation (CEFC) prohibiting it from investing in wind farms or small-scale solar projects. Opposition leaders and solar energy supporters say the government directive prohibiting CEFC from investing in rooftop solar will cripple the industry and further diminish Australia’s chances of transitioning to a clean energy economy.
“I don’t agree with the prime minister that if you just don’t have any government support for the future of renewable energy, that the renewable energy will just miraculously grow and increase in Australia,” opposition leader Bill Shorten told the Australian Broadcasting Corporation. He said that striking wind farms and rooftop solar from the CEFC will mean that “the only thing the CEFC can invest in is flying saucers.”
The Role of the Clean Energy Finance Corporation
The CEFC is a public fund that has invested more than $3 billion in clean energy projects and technologies. Wind and solar accounted for nearly half of CEFC’s portfolio last year. Without wind and small-scale solar, the CEFC can ostensibly only invest in what Abbott calls “new technologies,” such as bioenergy and ocean power. The fund also invests in efficiency projects, such as energy monitoring systems, industrial improvements, and refrigeration technology.
CEFC funding often goes to projects for low-income households, renters, and public housing residents. Those households often rely on the CEFC’s support to go solar, said John Grimes, the head of industry group Australian Solar Council. “To say this is about lowering the costs of power is cynical in the extreme,” Grimes told Guardian Australia. “What they’re doing with this is the precise opposite.
Think Progress reports that the directive followed failed attempts to completely dismantle the CEFC, despite broad public support for clean energy in Australia. Prime Minister Tony Abbott has been clear in his desire to do away with the CEFC and a strident supporter of the country’s coal industry. “It is our policy to abolish the Clean Energy Finance Corporation because we think that if the projects stack up economically, there’s no reason why they can’t be supported in the usual way,” Abbott told reporters in Darwin.
According to official documents, the CEFC currently expects an average lifetime investment portfolio yield of approximately 6.5%. That means its investments are expected to return the taxpayers’ money — with a profit. How the agency will now be able to generate a suitable return on its investment in light of the government’s latest directive is unclear.
The move by the prime minister has generated a substantial backlash from renewable energy supporters. “The government is effectively blood-letting the CEFC since its attempts to abolish it have been fruitless,” the shadow environment minister, Mark Butler, said. “Tony Abbott is broadening his assault on renewable energy technologies, putting thousands of Australian jobs and billions of dollars in investment at even further risk.
“This is the most blatant example of Tony Abbott’s lack of vision for Australia’s future. The whole world is moving towards clean energy and Tony Abbott is scrambling to take Australia in the opposite direction,” Butler told The Guardian.
The acting Greens leader, Scott Ludlam, told Guardian Australia the move is akin to a “protection racket” to try and ensure the viability of the coal and gas sectors. He said the move was “designed to knock off” the very successful renewables industry by ensuring that the CEFC is not financially viable. “By knocking off wind and solar, the only thing that you leave there is the high-risk stuff,” he said. “They’re trying to make it as difficult as possible for the CEFC.”
What’s Next for Clean Energy in Australia?
All of this sets up the possibility that the CEFC will fight the new policy, which is diametrically opposed to its mandate “to facilitate increased flows of finance into the clean energy sector.” In a statement on the fund’s website, the board said it is “seeking advice” on how to respond to the directive. Can an agency defy the direct orders of the Prime Minister if they are in conflict with its mission as defined in the legislation that created it? That is a novel theory that will be most interesting to watch.
Under the 2012 law establishing the CECF, the organization is meant to invest “using a commercial approach to overcome market barriers and mobilize investment in renewable energy, energy efficiency and low emissions technologies.”
In July 2014, Australia became the first country to repeal its carbon tax, despite overwhelming evidence that it was working successfully to reduce carbon emissions. In May, the country slashed its renewable energy goal for 2020 by nearly a quarter — from 41,000 to 33,000 gigawatt hours. At the same time, most of the world’s major governments are boosting their carbon reduction goals, especially the US, Brazil, and China.
The environment editor of the Sydney Morning Herald criticized the new directive in an op-ed piece, saying, “If Australia is to realize its remarkable renewable energy wealth, banks and investors will need to active players. And that is where the $10 billion Clean Energy Finance Corporation — again under fire by the Abbott government — is absolutely crucial.”
Here we have a know-nothing national leader who would rather line his own pockets and those of his supporters than protect the interests of the country and its people. How dangerously incompetent leaders like Abbott get elected is one of life’s greatest mysteries. It just goes to show that checkbook democracy is very much the rule in many countries, especially those that trumpet their belief in democratic principles the loudest.