The newly appointed chair of the Australian Renewable Energy Agency says he will be seeking clarity from either side of politics after the federal election on the agency’s ability to continue grant funding.
Martijn Wilder, a Baker & McKenzie lawyer appointed by the government to head a revamped board, said it was unclear what would happen to ARENA funds, given recent comments by both sides of politics.
The Coalition wants to end grant funding, cancel the $1.3 billion in unallocated but legislated funding, and push ARENA into a new role co-managing a new “innovation fund” using monies from the Clean Energy Finance Corporation.
Labor has said it will reserve $200 million for a funding round for large scale solar thermal and storage, and around $100 million for community energy, but will also remove the legislated funding – although it now says it will do so in “consultation” with the ARENA board.
“We will be working with future governments to secure adequate grant funding for ARENA to allow it to continue (it’s current role),” Wilder told the Energy Storage conference in Sydney.
“After the election we will sit down with the government of the day to confirm the future of the ARENA Act and the funds contained within the Act.”
“We respect the policy of the government of the day but I am personally keen to resolve the conflict noting the policies of both major parties are different to the (ARENA) Act – which may well require amending the Act.”
His initial priorities will be in proceeding with the current $100 million round of funding for solar PV projects. Finals bids are due next week from 22 short-listed projects. Wilder says the agency is also focusing on establishing the new innovation fund and “working within the constraints” of the caretaker government.
The issue over ARENA’s grant funding capabilities has been a hot topic in renewable energy industry. The former chairman, Greg Bourne, warned that Australia could lose research overseas if grant funding was indeed ended. Leading solar researchers warned last week that Australian solar R&D, which has led the world in recent decades and continues to set efficiency records, could be “wiped out” by the proposal.
Wilder said there was no doubt that some of the recently announced energy storage projects in Australia would not have gone ahead without grant funding.
“Australia is in midst of the most important economic transition in our lifetime. It will happen quicker than most people think … during our lifetime people will be quite amazed at the things that are coming through,” Wilder said.
“There are so many exciting opportunities and Australian innovators are better placed than most in the world.”
Wilder said the new Clean Energy Innovation Fund would provide opportunities because it would reduce the cost of finance (to one per cent above the bond rate) and allow for greater risk appetite in equity investments.
But in response to a question, Wilder said a large amount of CEFC funding had been unallocated because of the uncertainty over the future of the CEFC, and the difficulty in finding the right projects.
Giles Parkinson is a journalist of 30 years experience, a former Business Editor and Deputy Editor of the Financial Review, a columnist for The Bulletin magazine and The Australian, and the former editor of Climate Spectator.