The Australian has reported today that the recently elected Queensland Liberal National Party will withdraw $75 million in funding for the Solar Dawn solar thermal project – the successful tenderer under the federal government’s Solar Flagships program. The Solar Dawn consortium has yet to be informed by the Queensland government of such a decision.
In addition, the Queensland government, as outlined in its policy document last week, intends to cancel a range of other Queensland state government programs aimed at mitigating carbon emissions because it argues they are redundant under the national emissions trading scheme. It has however, committed to retaining the solar feed-in tariff, although official policy documents make no mention of the precise rate – currently 44 cents/kWh.
While a large number of state government greenhouse reduction programs are window dressing exercises, and therefore the clean energy sector should not be too concerned, there are some issues worth highlighting:
-- The LNP’s argument that it is removing the programs because they are “redundant” under a carbon tax is not actually true and is contrary with Campbell Newman’s stated intention, repeated ad infinitum, that he will seek to have the carbon price withdrawn. During the fixed price period of 2012-13 to 2014-15, Australia’s emissions are not subject to a hard cap, and any reductions made by the Queensland government will not blunt the level of the carbon price and the incentive for others to reduce their emissions. Also, if the carbon price is rescinded, as the LNP desires and Tony Abbott intends, then won’t all these programs no longer be redundant?
-- The solar PV industry needs something in writing confirming the government will keep the feed-in tariff rate at 44 cents. The LNP could halve the rate of the feed-in tariff and still claim that they have “retained the feed-in tariff”.
-- This event just reinforces how misguided grant tendering programs are for supporting renewable energy. So much can change or go wrong between when a project submits a tender and when it eventually gets built. If the federal government had elected to implement a feed-in tariff to support solar thermal and not commit to an individual project, then a number of solar thermal projects other than Solar Dawn would have continued to progress, and would be ready to step into the breach from Solar Dawn’s exit (if it occurs).