Australias government has continued its efforts to slow the rollout of renewables, while simultaneously saying it is a supporter of clean energy. The latest move has seen the treasurer and finance minister instruct the CEFC to cease funding wind projects and rooftop solar.
Defending the move, the government said the CEFC was created to support the roll out of new renewable technologies, despite the legislation underpinning the CEFC clearly stating that is not the case.
The AUD$10 billion (US$7.5 billion) CEFC is often referred to as Australias "green bank" and was created by the previous Labor government. It funds renewable projects on a for-profit basis, with the aim of increasing renewable deployment. The current government has repeatedly tried to scrap it, however the Senate has stymied its attempts on two occasions.
This latest instruction to the CEFC board specifically singles out wind projects and small-scale solar arrays from being funded by the investment body. It reads: "Mature and established clean energy technologies to be excluded from the corporation’s activities, including extant wind technology and household and small-scale solar."
Business as usual
The CEFC issued a statement today, saying projects to which it has committed funds will not be threatened by the governments most recent move. It also indicated it will continue to provide funding for renewable projects as it is required to do under the original legislation.
"The CEFCs investment activities, including development of new investment opportunities continues as previously, in line with the CEFCs purpose and responsibilities," it said.
"The CEFC Board is obliged to, and continues to, govern the corporation consistent with its legal duties under the Clean Energy Finance Corporation Act 2012 and the Public Governance, Performance and Accountability Act 2013. This is ‘to facilitate increased flows of finance into the clean energy sector’. The CEFC will continue do so by performing its investment function in accordance with Part 6 of the Clean Energy Finance Corporation Act 2012 by investing, directly and indirectly in clean energy technologies."
While individual solar projects would not attract CEFC funding, the body has been active in partnering to provide funds for solar lease schemes. John Grimes, the CEO of the Australian Solar Council (ASC), reacted to the governments latest instruction to the CEFC by saying that lower income households will suffer as a result.
"A key focus for the CEFC has been innovative finance models that allow low-income earners, people living in apartments, small businesses, nursing homes and churches to get solar and slash their power bills," he said, adding, "By prohibiting the CEFC from investing in solar projects, the Abbott government is stopping the most vulnerable from slashing their power bills."
Only days ago the CEFC announced it was providing $100 million to help rollout a solar leasing scheme developed by utility Origen.
Large scale solar projects open to the CEFC
Rather confusingly, environment minister Greg Hunt reacted to reports of small-scale solars exclusion from CEFC funding by saying the body should avoid financing projects and initiatives that could be funded by the private sector.
"I’ve been repeatedly critical of the CEFC investing taxpayer funds in projects such as existing wind farms, rather than focusing on solar and emerging technologies. Our policy is to abolish the CEFC but in the meantime it should focus on solar and emerging technologies as was originally intended," Hunt said, in reporting by the Sydney Morning Herald.
Since its inception, the CEFC has committed to provide $1.4 billion in funding for renewable projects themselves worth $3.5 billion. As of last week it had invested 33% of its funds in solar, 30% in energy efficiency, 21% cent wind and 16% other technologies.
While the news for rooftop solar and programs such as solar leasing is certainly not good, large-scale PV projects can still be funded by the CEFC. Since legislation to reduce Australias Renewable Energy Target has finally passed the Senate, it is likely that a number of projects could get off the ground in the coming months.
The governments instruction to the CEFC does represent only a draft change to the corporations mandate and may be altered. The government has previously said it must increase the returns of investment it delivers to the government, while simultaneously reducing its risk profile. It has attracted approximately $1 of private sector funding for every $1 it has invested to date.