ARENA to do a defiant CEFC?

The Australian Renewable Energy Agency’s chief executive, Ivor Frischknecht, has indicated that his organisation may find itself forced by legislation to operate in defiance of the government, if the forthcoming federal budget were to slash its funding.

Reports in various newspapers today say the agency will be abolished in tomorrow's federal budget, but that $1 billion in existing projects will be continued.

A few weeks ago, ARENA issued a letter to stakeholders which suggested they believed there was a high risk the government would significantly reduce their funding in the upcoming budget. The letter highlighted the uncertainty and speculation surrounding ongoing funding and essentially told project proponents seeking funding from ARENA that they might want to reconsider how much effort they put into project proposals.

More recently the Government’s Commission of Audit recommended that ARENA be dissolved and its activities rolled into the Department of Industry.

Mr Frischknecht in a speech given at the Solar 2014 Conference, pointed out that the Commission of Audit had misunderstood the role of ARENA and that of other government policies when it said the organisation duplicated other programs. His presentation noted that no other government program helped to support technologies through the pilot and demonstration stage. He also highlighted that once you took into account the government’s intention to abolish a number of the prior government’s programs, ARENA’s role became even more important.

In response to a question from Climate Spectator about the ongoing future of ARENA’s programs, Mr Frischknecht stated that until the ARENA Act was repealed, it was “business as usual” for the organisation and its programs.  Essentially if there was a conflict between the government’s budget and the ARENA Act, the board would be obligated to follow the guidance of the Act.

This seems to suggest they would seek to continue to fund projects under their planned programs using powers under their legislation to access government funding, even if this exceeded the funding the government had allocated to them in the budget.