The federal Labor opposition intends to block the Morrison government’s proposed changes to the Clean Energy Finance Corporation (CEFC) that will see the green bank open to investing in new gas projects.
Meanwhile, one backbench Nationals MP thinks coal is needed to strengthen Australia’s capacity to be resilient in withstanding problems that may come in the future, naming the pre-eminence of China as the biggest issue the country faces.
It comes as a new report by the Australian Competition and Consumer Commission (ACCC) forecasted a shortfall of gas reserves on the east coast from 2026, and after almost a year of actions by Beijing that have seen tariffs slapped on a range of products that came under the Free Trade Agreement with China.
Shadow Minister for Climate Change and Energy Chris Bowen said on Monday that while the labor opposition supported the creation of the federal government’s Grid Reliability Fund—which will see government investments in new energy generation, storage and transmission infrastructure—it would block attempts by the CEFC to invest in fossil fuels such as gas.
“We on this side of the House believe that the CEFC should remain a renewables and decarbonisation funding agency—not one that can be directed by the minister of the day to fund fossil fuels, as important as gas is,” Bowen said.
The opposition doesn’t want the green bank to invest in fossil fuels, for there to be a return on investment, and for the CEFC to decide which projects get funds instead of the minister.
Additionally, the CEFC, which was set up under the 2012 Labor government, is required to turn a profit for the taxpayer, but an expectation that individual CEFC investments are to achieve a return would be removed under the amendments.
Energy Minister Angus Taylor would also have the power to direct the green bank to look at investing in particular technologies.
Liberal MP for Wentworth, Dave Sharma, said investing in new gas projects is necessary to support the addition of new renewable energy projects.
“All of this renewable energy in the grid brings new challenges. While there’s no shortage of investment in clean energy, the government has identified a lack of investment in the dispatchable generation needed to support the increase of intermittent generation,” Sharma said.
“By focusing on getting the cost of new technologies down, we won’t raise the cost of incumbent technologies—like coal and gas—that continue to play an important role in the energy mix,” he said.
Expanding the CEFC Portfolio
In August 2020, the federal government sought to amend legislation to the $1 billion Grid Reliability Fund by expanding the CEFC’s investment portfolio to include gas projects under the definition of “low emissions technologies.”
Federal Energy Minister Angus Taylor said that the fund would encourage private investment in the “generation, energy storage and transmission projects needed to balance the grid and deliver affordable power.”
“Gas projects, which the CEFC can already invest in, including new gas fired generation, will be included in the fund when a project supports the achievement of low emission energy systems,” Taylor added.
While Bowen admits that gas will play a role in Australia’s energy system for the foreseeable future until other options are available to support renewables, the shadow minister criticised the federal government’s claim that gas was low-emissions.
“It has a role to play and it’s important, but it is not a low-emissions technology, and the government is engaging in sophistry by suggesting that it is.”
Backbencher Pushes for Coal Amendment
Former Nationals leader Barnaby Joyce tabled an amendment on Tuesday night that would allow for new investment in “high efficiency, low emissions” coal-fired power.
“The biggest issue for our nation, I hate to say, is not climate change, the biggest issue is the pre-eminence of China as a growing superpower, and our need to make this nation as strong as it possibly can be,” Joyce said.
“Anything we can do to make this nation stronger, to bring back its manufacturing, to bring back its capacity to be resilient enough to withstand problems that may eventuate in the future, if the course of events in the past is to be any sort of guide—we must have the capacity to have the cheapest and most reliable power we can get.”
On Jan. 21, Prime Minister Scott Morrison announced that he signed another two year deal with liquid natural gas (LNG) suppliers from the east coast as part of the government’s plan for recovery from the economic downturn caused by the measures put in place to slow the spread of the CCP (Chinese Communist Party) virus, commonly known as the novel coronavirus.
Energy Minister Angus Taylor added that gas is key to Australia’s economic recovery from the pandemic.
Six renewable energy and five gas developments that are shortlisted under the Underwriting New Generation Investments (UNGI) scheme could be funded by the CEFC if the federal government’s amendments passes.
Federal Parliament is currently debating the government’s amendments, with Labor and independent MPs introducing their own tweaks to the bill.
AAP contributed to this report.