Thursday, April 23, 2015
The Abbott government has put Australia's renewable energy industry into limbo -- and almost no-one seems to care
Well done! The writer below is a Warmist but his facts are pretty right
18 months after the election of a government supposedly "open for business”, the renewables industry in this country is in ruins.
Investment has fallen off a cliff – down a stunning 90 per cent since early 2013. More than 2000 jobs have disappeared. Almost no new large-scale renewable energy is being built in Australia, so hostile has the environment become. Banco Santander, the world's third-largest clean energy lender, packed up and left in March.
The reason? The government has sabotaged the industry. According to international energy consultants Bloomberg New Energy Finance, "the Australian large-scale clean energy industry has become practically uninvestable due to ongoing uncertainty caused by the government's review of the Renewable Energy Target.”
As we’ve chronicled here at New Matilda, the Renewable Energy Target was once the tripartisan policy of the Coalition, Labor and the Greens. The law, which was passed under the Howard government, mandates that there must be 41,000 gigawatt hours of renewable electricity fed into the grid by 2020.
Before the 2013 election, the Coalition promised many times to keep the RET. "We have no plans to change the renewable energy target,” Tony Abbott said in September 2011. "We will be keeping the renewable energy target,” Environment Minister Greg Hunt said in February 2013. "The Coalition supports the current system, including the 41,000 gigawatt hours target,” Liberal Senator Simon Birmingham said in July 2013.
The promise was broken in early 2014, when the government announced that former Caltex boss, noted climate change denier Dick Warbuton, would head up a review. Surprise, surprise: the review recommended abolishing the RET altogether. Energy Minister Ian Macfarlane then used the report as political cover to attempt to slash the RET, to 26,000 hours.
But the RET is a law which requires amendment, and Macfarlane has been unable to get any cross-bench support for his changes. He instead said he would "negotiate” with Labor over a revised target. After first refusing any kind of compromise, Labor eventually came all the way down to 33,500 hours. Macfarlane is holding out for 32,000. In the meantime, renewables investment tanked, and has never recovered.
You get the impression the Coalition is quite happy that negotiations have stalled. No deal on the RET means the renewables industry stays in limbo, killing investment and destroying the medium-term prospects of the sector. Meanwhile, carbon permit-free coal makes windfall profits. And Macfarlane doesn’t even have to do anything. He can just fiddle while the renewables sector burns.
If this wasn’t the Abbott government, and we weren’t talking about renewable energy, it would be difficult to believe. Imagine a government that set out, quite openly, to destroy an entire sector of business activity, for purely ideological reasons – breaking an iron-clad election promise in the process.
But that’s precisely what’s happened in renewable energy, which depends upon the RET to leverage new investment into the Australian grid. It might be the biggest scandal in economic policy in recent history – and almost no-one seems to care.