In Oscar Wilde’s Lady Windermere’s Fan, Lord Darlington pins the cynic as “a man who knows the price of everything and the value of nothing.”
As Tony Abbott tries to paint himself as an environmentalist, it’s worth asking the question: does he understand the value of renewable energy sufficiently to outweigh his finely honed sense of political opportunity?
While his address to the Australian Industry Group last Friday made not a single mention of renewable energy, greatly increased levels of renewable energy are a crucial part of any scenario that protects Australia’s environment into the future while also boosting our economy.
Volunteers with the 100% Renewable campaign have been visiting Mr Abbott lately at forums for the Liberal Party faithful to ask him about big solar. His favourite response has been “when the sun don’t shine and the wind don’t blow, the power don’t flow.”
Depending on your reading of this you could draw one of two conclusions: either he is demonstrating his knack for changing his tune to suit the audience (think ‘climate change is absolute crap’ delivered to the out of town audience in Beaufort in country Victoria). Or the other, possibly more disturbing aspect is that he fundamentally misunderstands a global industry worth $240 billion last year, for which Australia enjoys huge advantages in our sun and wind resources.
The Coalition’s failure to engage with the thinking behind the Clean Energy Finance Corporation is an example that shows both dimensions at work.
The report, released last week by the Expert Review Panel Chair, Jillian Broadbent, a Reserve Bank board member and respected businesswoman of 30 years’ experience, is a clear-headed assessment of what the renewable energy industry needs to establish itself in Australia.
Broadbent and her two co-panellists, David Paradice and Ian Moore, spoke with numerous cleantech companies and identified a number of financial barriers to what would otherwise be viable projects.
Importantly, the report acknowledges there are ‘positive externalities’ that flow from increased deployment of renewable energy and the main one of these is reduction in cost over time.
In the panel’s opinion, leveraging $10 billion of public money to generate further investment from the private sector will reduce the risk Australia faces from our highly emissions intensive power sector by bolstering renewable and low emissions alternatives. This can be achieved while generating a profit for the government equivalent to the government bond rate.
Cheaper power from non-polluting sources is a benefit that Australia desperately needs.
Our electricity generation sector is deeply dependent on coal and gas, which are both subject to serious upward cost pressure. The IEA predicts the price of coal-fired power will increase to pay for its greenhouse gas emissions and the NSW government warns that domestic gas prices will rise to meet the international gas price, which currently sits around three times higher.
On the other side of the coin, the cost of renewable power globally has decreased dramatically. The classic example is solar panels, which the Clean Energy Council estimates now cost a third of what they did three years ago due to the sharp drop in module prices. For larger scale plants, however, the big gains in cost efficiency are to be made in local engineering and financing and this can only be achieved through deployment.
Unlocking these cost savings in a sector as crucial to our economy as energy is the true value of the CEFC.
But the Coalition’s refusal to recognise the CEFC as anything more valuable than a political football has been obstinate and single-minded.
Tony Abbott let Andrew Robb off the leash six months ago, allowing him to verbal the renewable energy industry as “white shoe salesmen” and since then Joe Hockey has repeated the Coalition’s intention to repeal the legislation should it win government.
For his part, Shadow Climate Minister Greg Hunt has taken every opportunity to talk up individual failures of specific renewable energy projects around the world, while studiously ignoring the successes of programs similar to the CEFC, such as the US Loan Programs office that has dispensed nearly $35 billion in loans and created 60,000 jobs.
So while Mr Abbott’s concern for landscape revegetation may be highly commendable, his capacity to secure for Australia the benefits of a booming global market in renewable energy seems to have been thoroughly trounced by his weakness for political opportunity.
As Ms Broadbent herself expressed the problem, “It’s a long-term journey to adjust to a carbon-constrained world and the Opposition doesn’t seem to have much appetite to take too many steps towards it.”
Only a leader willing to ignore the threat Australia faces from its dependence on fossil fuels could so easily ignore the value of a body whose sole purpose is bringing down the cost of renewable power for all Australians.
Andrew Bray is Communications Coordinator at 100% Renewables.