Consultant Dan
10 May 2011
Australian Budget cuts undermine solar, wind, renewable energy
This was republished on Crikey.
This budget reflects the pessimistic view of solar and wind industries held by Martin Ferguson, Minister for Resources and Energy. There is $60 million additional funding for emerging geothermal and wave technology, regulation of renewable energy markets but mostly this budget shifts big money out beyond the forward estimates or cuts it outright.
Solar Flagships $850 million remains in the forward estimates from the promised $1.5 billion for building large scale solar PV and solar thermal power stations. This is a hit on Australia’s solar sector of $650 million over forward estimates.
(Funds remaining in Solar Flagships are 2011/2 $163.3 mill, 12/13 $163.1 mill, 13/4 $241 mill, 14/5 $283 mill.)
Previous cuts announced to pay for natural disasters cut $150mill and another budget line has cuts of $220mill. In theory the rest of the $1.5 billion program “will be restored beyond the forward estimates”, which means little if anything.
Connecting Renewables is necessary for the growth of the renewable sector, because our grid is old and was designed around coal-fired electricity. Most developed countries are putting billions into “smart grids” that facilitate renewable energy and energy efficiency. This budget has $1.4 million over 3 years to support design work on how to connect renewables to the grid. This is a key election commitment which has turned into failure.
National Solar Schools grants up to $50,000 for solar panels, solar hot water, water tanks and other measures to save energy and water in schools. This has been cut by $156 million and will see the program close early, on 30 June 2013. The remaining funds will now be directed to prioritise spending in poor and remote areas, in accord with new guidelines due out on Budget night.
Renewable Energy Venture Capital Fund is necessary for innovators who want to take their innovation to market here in Australia. In the past, solar researchers like Dr Green and his student Dr Zhu took their intellectual property to the USA and China, because Australia would not invest in them.
This budget cuts $70.2 million, leaving $60mill in forward estimates up to 2014-15 (with another with $3.8mill to Australian Centre for Renewable Energy to administer the grants). These funds will provide equity to support support private capital for development and early commercialisation of renewable technology
Emerging renewables is an election commitment to support new technology especially geothermal and ocean energy. This is code for Minister Ferguson’s lack of faith in exis ting, proven solar and wind technology. He holds on to the notion that renewable energy is in its infancy and will not be able to carrybase load until new technologies are invented (or perhaps brought to us by Dr Who).
The good news is that the program will provide $102.2 m grants, an increased from the $40 million promised.
Renewable energy target regulation is necessary to manage the trading of renewable energy certificates, which are the basis of the market in clean energy in Australia.
There is a new $59 million over 5 years to create an inspection regime for solar PV panels and otherwise support the Office of the Renewable Energy Regulator. This will include $6.6 million for new information technology for Regulator. The Regulator is being made to increase its cost recovery through administration of the renewable energy target. It will increase the registration fee for transactions involving small scale energy certificates from 8 to 47cents, raising $14 million over 4 years.
There will be public and industry consultation about increasing the cost recovery measures for the Regulator. These are good measures because the solar PV industry needs strong regulation to maintain safety and quality.
Solar Cities fosters community projects in 7 cities, to provide renewable energy demonstration programs. This budget reallocates $13.7 million over 2 years to restore underspends from earlier years.
This puts a great deal of pressure on carbon tax negotiations. Australia’s renewable industries already employ something like 8-10,000 and turn over $2billion. They deserve proper support, to help cut energy costs, employ Australians and reduce emissions.
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