Australia benefits from Clean Energy Finance Corporation
The Opposition has said it will not honour contracts written by the corporation, discouraging companies from investing in projects reliant upon those contracts. Although Yates acknowledges that this is possible, he suggests that this would be an unusual precedent that could threaten the attractiveness of any government contract in future
Can we do without a clean energy finance bank? SBS WORLD NEWS, 25 JUN 2013, SOURCE: THE CONVERSATION Jenny Riesz asks how an Abbott Government would make sure Australia brings to market the diverse ranges of renewable technologies needed to transform our energy sector. The Opposition has clearly stated its intention to remove the Clean Energy Finance Corporation if it takes government at the next election. Will the Coalition introduce another mechanism to take its place? How will an Abbott Government make sure Australia brings to market the diverse range of renewable technologies we need to transform our energy sector?…….
The corporation does not provide grants. It is designed like a “green bank”, providing loans for clean energy projects. Loans must be ultimately paid back, and the corporation is expected to make a return over the investment portfolio. Dividends will be paid to ARENA. The intention is to provide an ongoing, self-supporting scheme that keeps producing renewable technologies over the long term without being a drain on taxpayers.
The corporation is required to co-finance projects with the private sector so that support does not displace private investment. Schemes of this sort have been or are being established around the world (such as the UK Green Investment Bank and the US Green Bank), and in Australia (such as the Low Carbon Australia fund, which achieved a private investment ratio of 13:1).
Without the corporation, the Renewable Energy Target will support significant deployment of the most mature renewable technologies. This is likely to be mostly wind generation. However, as recently reiterated in detailed modelling by the Australian Energy Market Operator, a reliable renewable power system needs diversity. Wind still has room to expand significantly, but ultimately we will need a diverse mix of technologies such as photovoltaics, solar thermal, biomass, geothermal, wave andstorage technologies……..
Analysis by Ernst & Young shows that the corporation has increased private sector interest in investing in renewables in Australia. And that has increased Australia’s “attractiveness” in the global renewables investment market, pushing us to fourth place (below the US, China and Germany).
Ongoing policy uncertainty due to the lack of bipartisan support for the scheme undoubtedly undermines market confidence. However, Oliver Yates, the CEO of the corporation has said he believes that the Opposition’s view is based upon “preconceptions” that no longer apply now the CEFC is in operation with a clearly defined investment strategy and approach.
The Opposition has said it will not honour contracts written by the corporation, discouraging companies from investing in projects reliant upon those contracts. Although Yates acknowledges that this is possible, he suggests that this would be an unusual precedent that could threaten the attractiveness of any government contract in future. ……. HTTP://WWW.SBS.COM.AU/NEWS/ARTICLE/1782170/COMMENT-CAN-WE-DO-WITHOUT-A-CLEAN-ENERGY-FINANCE-B
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