Antinuclear

Uncertainty over Liberal Coalition’s plans to cut renewable energy incentives

”What we’re heading into is a period of sustained high volatility in the industry. There is a high possibility that, if this is not managed correctly, we will all end up with much higher costs than we could have had.

”You can transform the energy system in a non-disruptive fashion or in a disruptive fashion … But ultimately it is going to be transformed.”

Money trail backs the clean energy revolution, SMH, Ben Cubby, Peter Hannam 31 Aug 13   “…….At present, the Coalition has promised to abolish the carbon price, the Clean Energy Finance Corporation and the Climate Change Authority – which will recommend the greenhouse gas reduction targets that will in turn influence renewable energy growth.

This week it also announced that it would cut funding to the Australian Renewable Energy Agency – an independent group that oversees about $3.2 billion in renewables investment, and which the opposition has previously said would be retained.

The exact nature of the newly pledged cuts remains obscure. ”There will be some savings over the forward estimates – those details will be out with the full costings before the election,” a spokeswoman said.

The head of the renewable energy agency, Ivor Frischknecht, had told Fairfax Media earlier in the election campaign that he believed his agency would be left untouched by the Coalition.

”It’s not been a topic that we’ve discussed. We have been given no reason at all to believe that,” Frischknecht said.

The election is seen by many in the renewables and finance sector as a fork in the road for renewable energy. Data prepared by banks and investors suggests a massive amount of private investment, totalling about $4.1 billion, would be held back over the next three years under a Coalition government, if it engaged in a campaign to force a repeal of the carbon price legislation in the Senate.

”Why would you spend money when there is real uncertainty around the return – people will just sit on it until the last minute,” one finance sector source said.

But the impact that would have on households is uncertain. Most of the effects would be felt in large-scale projects like wind farms and utility-scale solar power stations, with household renewable energy still expected to record big growth.

A key to the thinking of investors is that both major parties still support the mandatory renewable energy target, which dictates that a fifth of the nation’s total energy must come from renewables by 2020.

That provides some basis for thinking the cost of renewables will keep coming down, driven by fixed demand for fuel-free energy. And if the past five years are any measure, Chinese manufacturers will continue to churn out solar panels that are cheaper and cheaper.

”There is an enormous amount of capital tied up in our energy systems, and what we are seeing is a transition from high carbon to a low carbon system,” Yates says.

”What we’re heading into is a period of sustained high volatility in the industry. There is a high possibility that, if this is not managed correctly, we will all end up with much higher costs than we could have had.

”You can transform the energy system in a non-disruptive fashion or in a disruptive fashion … But ultimately it is going to be transformed.”

August 31, 2013 - Posted by Christina Macpherson | election 2013