YOUR SUPPORT COUNTS
Help CEDA shape the economic and social policies Australia needs for a brighter future. Make a donation today.
Capital from banks is likely to be available for commercially viable renewable projects under the carbon tax scheme but constant changes to government policies could threaten that bankability, attendees at a CEDA forum in Melbourne have heard.
At the one day Renewable Energy: Regulation, Commercialisation and Investment forum, ANZ Banking Group Executive Director, Utilities and Infrastructure, Rob Koh said he thought the carbon price mechanism proposed was "bankable".
"In our view the carbon price mechanism is no more and no less complicated than what we see in New Zealand, the EU, and what is proposed in Korea and in California - I'm not scared of them as a banker," he said.
"To be clear, projects will need to be commercially feasible - but in terms of banking that scheme once it's in, we believe it will be a bankable scheme - so that for a banker is quite a big and bold statement."
However, he said while ANZ was interested in working with the sector to find financing options, policies take time to understand and assess and if they were constantly changing that would make it difficult.
In addition to looking at financing and investment options for renewables, the one day forum also addressed other key issues including technological progress of the sector and government plans for the future.
As part of a discussion on the future of renewables, Clean Energy Council Chief Executive Officer Matthew Warren said he saw push back in some regional communities and in the media as a sign of the strength of the industry.
He said it showed that the renewables sector it was no longer seen as a novelty industry but was here to stay.
However, he highlighted that because of the politicisation of current debate around clean energy, progress by the sector wasn't necessarily being promoted.
"It's worth noting and it's an interesting observation that a lot of the companies opposed to a carbon price are also working quite significantly to develop their own renewable projects or technology opportunities," he said.
"Part of the frustration of the current debate we face is because of the politicisation of it, those good stories and those investments are seen as something to keep quiet and not make too much of until we get through this political cycle."
Mr Warren said that public interest in action on renewables had dropped with the GFC and breaking of the drought, but there was still strong acknowledgment within the business sector that swift action was needed on climate change, which may surprise some given media coverage.
He also highlighted that while a constant critique of renewables was that it would never provide baseload power, it needed to be remembered that renewable technology development was 60 years behind the rest of the energy sector and needed time and investment to develop the right technologies.
Clinton Foundation Clean Energy Program Director Tony Wood said lobbying for different policies, such as feed-in tariffs, rebates or capital grants, had resulted in a "mishmash of policies" and they need to be better designed and better integrated.
"It seems to me that these policies generally act in exactly the opposite direction from what we should be looking for if we want to actually cause a revolution in renewable energy technology so that renewable energy technology can deliver on its promise," he said.
"They do two things, firstly they provide a very strong mechanism for bureaucrats to take low risk and secondly they provide a very strong incentive for investors to invest in the technologies available today.
"This is exactly opposite of what we should be trying to do if we are seriously trying to drive renewable technology down the cost curve and achieve the economy of scale and economy of learning that most people think they can achieve."
He said governments needed to:
On the proposed Clean Energy Financing Corporation, he said it had the potential to "bastardise" the RET and government needed to be "clear on where it sits in relation to that question" but what it may be able to do is address some of the inefficiencies in capital grants programs.
Providing a government perspective, Victorian Department of Primary Industries Director of Energy Investment Dr Adrian Panow said the top three things the Victorian Government would be doing to attract investment would be promoting the natural resources available, a connections review and having a strong innovation program with substantial funds behind it.
He also highlighted that we are in a hybrid environment and that fossil fuels, even with the success of current policies, will continue to play a significant role in energy supply.
Nuclear was also raised by forum attendees in a number of questions. However, speakers pointed out that it was being included in modeling but there was very little public support and even if it was being considered, there were financing challenges.
"In addition to the challenges nuclear has in relation to waste disposable particularly, there is a serious challenge now with financing nuclear because most of the projects that have been built in the west in the last little while are well over budget both in time and cost," Mr Wood said.
"So therefore unless some of those projects get back on schedule, it is going to be extraordinarily difficult for the private sector to finance those…so there are some serious financing challenges."
Click here for the event audio and presentations.