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Clean energy faces $4b hit

Date

Ben Cubby and Tom Arup

Exclusive

The Coalition's climate change plan is about $4 billion short of the funding required to meet its greenhouse emissions pledge.

The Coalition's climate change plan is about $4 billion short of the funding required to meet its greenhouse emissions pledge. Photo: Paul Jones

About $4 billion in private funding would be sucked from Australia's solar power and renewable energy industries over the next three years if the Coalition wins government, confidential data obtained from banks and financial analysts shows.

The Coalition's climate change plan is also about $4 billion short of the funding required to meet its pledge for a 5 per cent cut in greenhouse emissions by 2020, and is instead on track for a 9 per cent increase by then, according to analysis commissioned by the independent think tank The Climate Institute.

Although the Coalition rejects that analysis, major investors are planning for the impact if Opposition Leader Tony Abbott wins power and axes the carbon price and dismantles the clean energy finance system. They expect about $4.1 billion in private funding would be directed away from large-scale renewable power - starving the sector of capital - due to regulatory uncertainty and a lack of solid returns.

''Under this scenario, the winners are probably going to be the gas guys and the wind guys - you will see a charge towards getting lots and lots of wind farms up at lowest cost because you have still got to meet the [renewable energy target],'' a source within the sector said. ''It's going to change the shape of the industry.''

Mr Abbott said at the weekend that spending under his ''direct action'' climate change plan would remained capped at $3.2 billion, even if it meant missing the Coalition's pledge to cut greenhouse gas emissions by 5 per cent by 2020.

Climate change spokesman Greg Hunt reaffirmed the Coalition's support for the mandatory renewable energy target, which commits Australia to 20 per cent clean power by 2020.

Mr Hunt said $3.2 billion would be enough to meet the 5 per cent target because cutting carbon emissions was getting cheaper.

''First, because of a collapse in overseas demand for our manufacturing goods, our emissions task is lower,'' he said. ''Second, the available quantity of abatement is higher. We did not include revegetation in our initial assessments and there is significant opportunity there. Third, the likely cost is now lower than we expected given international events.''

The renewables sector, which now employs more people than the car industry, is nervously awaiting the election result.

Clean Energy Council chief executive David Green said: ''Australia's significant clean energy potential is being held back by seemingly endless rounds of review … our main need is for policy stability to drive investment.''

A major survey of businesses has found uncertainty about the future of the carbon price has had a negative impact on over half the responding firms. The survey by consultants AECOM found 65 per cent of businesses supported an emissions trading scheme, 29 per cent backed a carbon tax and just 7 per cent supported the Coalition's direct action.

25 comments

  • Both major parties are out to look after the interests of their mates - that is the big multinational mining corporations not the Australian people. The people of Australia have seen no benefit from the mining boom as 70% of profits flow offshore to foreign shareholders. The environment isn't even considered as shown by the LNG Gladstone harbour disaster, the same environmental destruction is set to continue no matter who wins.
    Think about your vote - and FIGHT FOR THE REEF!

    Commenter
    Mako
    Location
    The Deep Blue Sea
    Date and time
    August 19, 2013, 7:53AM
    • @Mako,

      You claim Australians see no benefit from the mining boom. What about the tens of billions paid in taxes and royalties EVERY year? What about all the high paying jobs for low skill workers? What about all the service industries, the engineering and construction industries? What about the aboriginies who often get hundreds of millions for approving a new project?

      Commenter
      NotFooled
      Date and time
      August 19, 2013, 8:59AM
    • ten's of billions... really?

      Commenter
      Davos
      Date and time
      August 19, 2013, 10:52AM
    • Only a fool would settle for 30% of the share of COMMONWEALTH mineral profits! And that's what we have running the show or potentially running the show. Remember the two speed economy, remember all the previous mining booms, who profits? Only a select few and in Australia's case, those few are mostly foreign shareholders who DO NOT pay tax in Australia! Like all blinkered pro-miners you completely ignored the environmental costs, ignorance is bliss apparently! The coal energy age is at an end, when you wake up and realise that, you will feel much better!

      Commenter
      Mako
      Date and time
      August 19, 2013, 11:11AM
  • If Australia, which is one of the countries to be most affected by climate change - doesn't bother about it, why should anyone else??
    Greg Hunt is an embarrassment to the postgraduate community.

    Commenter
    Politjunkie
    Location
    Moorabbin
    Date and time
    August 19, 2013, 8:11AM
    • 'Climate change is crap' - that is what he said and guess what, for the FIRST time Abbott is standing by his word.

      Commenter
      Mark
      Location
      Melbourne
      Date and time
      August 19, 2013, 8:15AM
      • So, here we have a bloke who reckons global warming is crap and he wants to dismantle an industry that employs more people than the car makers do, no wonder he wants to pump money into this silly tunnel.

        Commenter
        Trashman
        Date and time
        August 19, 2013, 8:19AM
        • Australia being one of the most geologically safe places in the world. It amazes me that even though CO2 is more deadly and causing more harm in the world than Nuclear power. So why don't we use Nuclear power? Wow you could cut your co2 emissions by 40% right on the spot. Solar only works during days time. And what was it we need 58,000 wind turbines to power (when the wind is blowing) Australia. So over the greenly bull that goes on in this country.

          Commenter
          Get Real
          Date and time
          August 19, 2013, 8:30AM
          • Because it is still too expensive and still too dangerous (ask Japan...). why dig up something, high tech enrich it, then high tech process it, then hi tech 'dispose' of it when you are bathed in free solar energy, blown around in free wind energy, standing on top of free geothermal energy, swimming in free wave energy, farting out free biogas. Why would we invest billions in nuclear energy again?

            Commenter
            davros
            Date and time
            August 19, 2013, 9:00AM
          • There have been 3 reports that researched the cost of going 100% renewables. They are:
            (1) The AEMO Report - AEMO are the Australian Electrical industry wholesaler
            (2) The University of NSW report, which is peer reviewed
            (3) The Zero Emissions report

            All 3 basically showed that moving to 100% renewables to cover the entire energy needs of the Australian population was not only possible, but could be done in 10 years and at a cost at less than double the existing pricing.

            It's the risk of nuclear that is the problem. Nuclear power plants are actually so dangerous that no insurance company in the world will insure one. Nuclear suffers from one undeniable problem that can never be removed - human error. The problem with human error is that it can never be removed.

            Commenter
            Tone
            Location
            Melbourne
            Date and time
            August 19, 2013, 9:05AM

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