Government accused of stealth campaign against renewables after wind, solar axed from Clean Energy Corp's spending remit

Extract from ABC News

AM

Updated 3 minutes ago

Photo: The CEFC has been told not to invest in small-scale solar technology. (ABC News)

The Federal Government has been accused of trying to shut down the Clean Energy Finance Corporation (CEFC) by stealth after ordering it not to invest in wind and small-scale solar power projects.

The $10 billion fund has been ordered to stop investing in wind and small-scale solar projects and told its focus must be on new and emerging technologies.
The directive was issued as part of a deal with crossbench senators to reduce Australia's Renewable Energy Target (RET).
Labor's federal environment spokesman Mark Butler has accused the Government of trying to shut down the fund, saying the moves mark a "dramatic escalation" in the Government's war on wind farms.
"The Government is deliberately trying to make the job of the CEFC impossible in order to achieve what it's been trying to achieve unsuccessfully through the Parliament, which is to stop it doing its job at all," Mr Butler said.
Environment Minister Greg Hunt has defended the moves, telling Sky News that "the purpose, the intent, the concept" of the CEFC "was to focus on emerging technologies".
Investors said the Government's decision to stop putting taxpayer money into wind and solar was making a difficult investment environment even worse.
The head of Bloomberg New Energy Finance in Australia, Kobad Bhavnagri, said the new directives would make a difficult investment environment even harder.
"I certainly think it makes Australia very unattractive," he said.
"One has to remember that we are really in a global marketplace for capital, for investment, for employment of companies to come and bring their expertise here and invest their dollars in Australia.
"And likewise we're in a global marketplace where Australian companies, Australian investors, Australian banks can look to pursue opportunities overseas if the environment in Australia is unfavourable.

What is the CEFC?

• The CEFC was set up by the Gillard government in 2012.
• It mobilises capital investment in renewable energy, low-emission technology and energy efficiency in Australia.
• The corporation operates like a traditional financer, working with co-financers and project proponents to seek ways to secure financing solutions for the clean energy sector.
• It focuses on projects and technologies at the later stages of development which have a positive expected rate of return. 
• As at June 30 last year, the CEFC had contracted investments of over $900 million in projects with a total value of over $3 billion.

"And sadly, the conditions created over the last few years, first through the review of the renewable energy target ... and now this latest move is just an accumulation of factors and evidence that really say and paint a picture that Australia is not really open for business if you're in the business of wind energy."
The wind energy sector had been buoyed by the recent bipartisan support for the RET, but Mr Bhavnagri said the directive from the Government to the CEFC had changed the mood of investors.
"When the deal was done on the RET, I think the wind industry as a whole breathed something of a sigh of relief," he said.
"But that sense of relief and perhaps renewed optimism that investments could be made in the short-term was jolted by some very negative comments by the Prime Minister in the weeks following, saying that he finds wind farms aesthetically displeasing and would love to reduce the target by more if he could.
"These sorts of remarks and these sorts of comments really do send a chill down the spine of any investor who's looking for a stable and predictable policy environment."
Mr Bhavnagri said he believed the moves were a "thinly veiled attempt to put a positive spin on what really is an ideological drive by the Government".
"The CEFC has a very independent board that will make decisions on what are the best projects and what are the best technologies to invest in for the country and for the industry and for the advancement of renewable energy as a whole," he said.
"Any political handcuffs that look to shape the operation of a body that will make professional decisions is unhelpful, and it means that the experts can no longer make expert judgments because they are being directed by political players."

The CEFC's governing legislation says relevant ministers may direct the corporation on the technologies that are eligible for investment, but may not give a directive that is inconsistent with the object of the Act to facilitate "increased flows of finance into the clean energy sector".