There are only so many sources of renewable energy, and it’s disheartening to see a developed nation take a backwards step when it comes to solar power, wind power and hydropower. But that’s exactly what prime minister Tony Abbot and his Coalition have done. A directive issued to the Clean Energy Finance Corporation (CEFC) by finance minister, Mathis Cormann and treasurer, Joe Hockey forced the authority to discontinue its financing of mature wind farm technologies.
The real tragedy, however, is that this is not news to the Australian people, or the sector which has suffered through 18 months of uncertainty after a bi-partisan deal was struck to lower the RET from 41,000GWh to 33,000GWh by 2020.
A Lifeline Amidst Investor Apprehension
While private investors are expected to contribute AU$8.7 billion over the next five years, the loss of a corporation that has injected AU$300 million into wind projects since its three-year history represents a significant setback. Co-financing options backed by the CEFC are what have allowed wind technology projects to operate at levels of high risk and cost implementation. According to the company’s website, one third of all proposals received are in relation to wind energy.
Leader of the opposition, Bill Shorten has accused the government of sabotaging the health of an entire industry based on runaway political ideologies. And Greg Hunt, labor spokesman for the environment, has condemned the mandate.
Government Sets Sight on Solar Energy
Projects involving wind turbines have been described by the prime minister as “visually awful” in recent months, and now small-scale household solar energy initiatives join them in the crosshairs. The Abbott administration is once again threatening to abolish the CEFC despite the Senate blocking such actions on two previous and separate occasions. The company has posted gains of some 7 percent per annum, comfortably above baseline returns. In its first year alone, the fund garnered AU$900 million in contracted investments, and though government directives may be issued, they must be in line with the company’s objective to facilitate investment opportunities in clean and efficient technologies. If the government succeeds in its endeavor to crush the efforts of its predecessor, it may strip the industry of thousands of jobs — this at a time when unemployment is at 6 percent and rising.
This conflict of interest goes against the sensibilities of many Australians and may trigger a double dissolution closer to the next election, which greens leader Christine Milne says the Senate is not afraid of doing.
Spillover Effects and International Condemnation
Abbott’s refusal to coordinate with the global effort in reaction to carbon emissions and his unwillingness to adopt broader strategic energy management processes are placing downward pressure on relationships with potential foreign investors. The mining boom is over and despite the government’s insistence that only emerging technologies be explored for their cost-efficiency, it seems unlikely this segment will be able to survive without its established counterparts. Any reallocation of funds across the 33 percent solar, 21 percent wind and 16 percent other technology divide will result in the irreversible destabilization of a sector that supports and is supported by the public interest.
Why such directives have even been issued can only be attributed to reasons relating to self-interest and self-preservation. The fact that a commissioner has been appointed to conduct and oversee research into the potentially harmful side effects of wind farms is as transparent as it is egregious.
One thing that’s clear to all concerned is that the environment is fighting a losing battle against the prime minister of Australia.
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