Green bank stops cash before talks on its axing

DLP Senator for Victoria John Madigan talks with Steve Garner, General Manager Keppel Prince Engineering. Photo: Rob GunstoneAustralia’s $10 billion green bank has halted investments in clean energy projects, with executives hoping to convince the incoming Coalition government not to axe it as promised.

Leading business groups said the Abbott government should be prepared to immediately legislate to lower the carbon price to international rates if it faces parliamentary delays repealing the scheme and putting in place its direct action plan.

The Clean Energy Finance Corporation hopes it can use upcoming talks to convince senior Coalition figures its goals can be modified to achieve the new government’s plans without a change to legislation.

The Coalition vowed to axe the bank in opposition. Coalition finance spokesman Andrew Robb said ministers would sit down with the corporation once confirmed.

Since July, the corporation has invested $560 million in projects such as the Moree Solar Farm and Taralga Wind Farm. It claims its activity has encouraged a further $1.6 billion in private investment towards clean energy projects.

”The [corporation] has approached the Coalition to engage in consultations about the transition and how the opportunities it has identified can support the incoming government’s policy priorities under direct action,” said Oliver Yates, the corporation’s chief executive.

The bank will claim its lending to date will save carbon dioxide abatement at the cost of minus $2.40 a tonne – in other words, returning funds while cutting emissions. And contrary to cost savings promised by the Coalition, the CEFC says scrapping it would cost the government money from 2014-15, since its returns are required to exceed its cost of funds.

Solar, wind

Among the recent projects approved for CEFC support was $60 million in debt for the Moree Solar Farm. Finance was settled last week.

The 56-megawatt solar photovoltaic power plant, to be built over 350 hectares in northern NSW, would not have gone ahead without the loan, said Lane Crockett, general manager of Pacific Hydro, one of the farm’s shareholders. At least 100 jobs will be created.

Stephen Garner, general manager of Keppel Prince Engineering, said at least 70 jobs at the wind tower maker in Victoria had been saved by the CEFC’s loan of $37.5 million for the 51-turbine Taralga Wind Farm planned for a site north of Goulburn in NSW.

The cheaper finance enabled the project to source the company’s towers in Australia rather than import them. “We just couldn’t survive any longer without securing that project,” Mr Garner said.

He said he had told his Coalition MP Dan Tehan, the incoming government should avoid scrapping the CEFC. “It not only saves money, it saves jobs,” he said.

Renewable energy supplied to the national electricity market serving the eastern states and South Australia has more than doubled in the past five years, according to consultants Pitt & Sherry. In August, the share of renewables to that market was 14.9 per cent.

Last year industry invested $4.2 billion in renewable energy and energy-smart technologies, the Clean Energy Council said. Some 24,300 people were employed in the industry at the start of the year.

Business call

The Business Council of Australia and the Australian Industry Group said the Coalition’s mandate for repealing the carbon tax should be respected by Parliament.

But the council’s deputy CEO, Maria Tarrant, said if there was a parliamentary delay, the Coalition should introduce legislation to cut the cost business pays for each tonne of greenhouse gas it emits to about the international price – currently about $6 a tonne – while it tries to implement direct action.

The Coalition faces a tough time axing the carbon price, with Labor and the Greens – who hold the balance of power in the Senate until July 1 next year – saying they will vote against the legislation. After the middle of next year, the Coalition will need to deal with independents and minor parties.

Ms Tarrant said business was currently paying rates for carbon emissions well above the international prices.

She said it was unlikely the price for the current financial year – $24.15 a tonne – could be lowered but she said legislation could be prepared to reduce it after that, before the tax is repealed.

The original release of this article first appeared on the website of Hangzhou Night Net.

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