Government MPs push for renewables funding to boost climate credentials

By Nicole Hasham and Peter Hannam

February 22, 2019 — 12.00am

A group of Liberal backbenchers believe the government’s weak climate policies are an electoral liability and are agitating for a host of pre-election pledges including funding for renewable energy development, expansion of the hydrogen industry and helping the nation adapt to global warming.

The push follows Prime Minister Scott Morrison’s acknowledgment this month that climate change contributed to recent devastating extreme weather events, and comes as the Australian Renewable Energy Agency reveals it is fast running out of money to fund projects critical to shifting the nation to a low carbon economy.

Internal agreement on climate change policy has been the Achilles heel of the Coalition’s two terms in office and Mr Morrison has said the government will make new pledges on the issue ahead of the May election.

Government backbenchers say the Coalition needs stronger policies to convince voters it is serious about addressing climate change. Pictured: Genex Power's Kidston pumped hydro and solar plant in Queensland.

It has previously been speculated that this will include pouring at least $1 billion over three years into the Abbott-era emission reduction fund, which pays companies to reduce their pollution.

The Sydney Morning Herald and The Age has learnt that government MPs keen for climate action have strongly urged Mr Morrison and senior ministers to take further action to show voters that the Coalition takes climate change seriously.

The backbenchers, mostly from the moderate faction, are understood to have argued for policies to help adapt to the changing climate, embrace low-emissions hydrogen technology and further boost the nation’s standing in climate science.

The proposals include a major cash injection into ARENA, a federal agency established by the previous Labor government to fast-track Australia’s transition to affordable, reliable renewable energy.

Developing new energy technology is risky and capital-intensive. ARENA funding assists researchers, businesses and developers who can show their project is feasible and has good commercial prospects.

ARENA has been credited with helping to halve the cost of building large-scale solar developments and enabling the world’s biggest battery to be built in South Australia, among other successes.

Under former prime minister Tony Abbott, the Coalition sought to abolish ARENA. When this bid failed in the Senate, the government instead slashed the agency’s funding.

It is understood that pro-climate backbenchers believe funding ARENA accords with the Liberal aims of innovation and job creation, and is an option least likely to ruffle the feathers of the government’s climate-sceptic right wing.

ARENA chief executive Darren Miller confirmed that as of the end of January, the agency had $378.6 million of uncommitted funds.

A "significant pipeline of potential projects" had made approaches for funding, meaning the remaining money would be spent within 18 months, after which "we will no longer be in a position to commit funding to new projects without additional funding".

It is understood that while the agency expects to remain open to new applications this year, it has issued warnings that the funding uncertainty means support for projects is far from guaranteed. If more government funding is not forthcoming, the agency will be forced to wind down and focus on managing its existing portfolio.

Labor's climate change and energy spokesman Mark Butler said his party established ARENA and remained committed to the agency.
Credit:Alex Ellinghausen

Neither the government nor Labor have committed to new funding for ARENA. This is despite serious looming challenges in Australia’s renewable energy transition including modernising the electricity grid to deal with the influx of distributed renewable energy sources. Urgent action is also needed in transport, the built environment, industry and other sectors to cut greenhouse gas emissions in line with the Paris agreement.

Labor has pledged to expand ARENA’s mandate beyond renewable energy to other emissions reduction projects. The party’s climate change and energy spokesman Mark Butler said his party remains committed to the agency and will consider its funding should it win office.

"ARENA will play a crucial role in delivering Labor’s climate and energy policies, from supporting energy efficiency in business, to developing the hydrogen industry of the future, to pushing out the frontiers of renewable and other technologies," he said.

A spokesman for Energy Minister Angus Taylor said ARENA's funding was secured in law until mid-2022 and "I am not going to speculate" on potential election commitments.

Clean Energy Council chief executive Kane Thornton said ARENA had achieved much but its job was "only half done … if we let its funding run dry we miss many more opportunities to develop local innovation".

ARENA funding has helped realise dozens of projects and helped make renewable energy "a viable way for miners, manufacturers and other traditional industries to reduce their energy costs," he said.

Greens climate change and energy spokesman Adam Bandt said Mr Morrison "repeatedly puts ARENA up in lights to make it seem like he has a climate policy, but behind the scenes he’s just waiting for the funding to run out".

https://www.smh.com.au/politics/federal/government-mps-push-for-renewables-funding-to-boost-climate-credentials-20190221-p50zby.html