Page 2315 - Week 08 - Wednesday, 5 August 2015
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The CEFC is not a grant organisation like ARENA; the CEFC is effectively a bank where it makes investment and it is required under its legislation to get a reasonable financial return—indeed, the same type of return a private bank would get on its investments. It is not the role of the CEFC to invest in emerging technologies. That is the role of the Australian Renewable Energy Agency, and that is why it does not give loans; it gives grants. The CEFC gives loans, and one of its key purposes is to educate and pull forward finance from the private finance sector. We know how traditionally conservative private lending institutions are, and we know they will often not lend if they have any uncertainty or any doubt about the projects they are investing in.
The CEFC was established so it can come forward, demonstrate there is a sound business case that warrants investment, provide some of that investment finance itself and pull forward investment from the private sector. That is why the CEFC has been very effective at achieving not just a positive financial return on its own investments, but also partnering with some of the largest financial institutions in Australia—the big four banks and others—that have co-invested with the CEFC to support mature, established renewable energy technologies and renewable energy projects.
The language in the messaging from the Liberal opposition here and the Liberal government federally has been, at the very least, delivered on the misguided basis—that is, that somehow the CEFC is there to support emerging technologies. No. The CEFC is there to drive investment in what are quite mature and well-advanced renewable energy technologies that, because of their relative newness, still find it difficult to secure traditional finance from the private lending markets.
What is so devastating about the proposed draft directive to the CEFC from the federal government in not supporting small and medium-scale solar and wind energy generation projects is that, firstly, it has sent the signal to the private sector that those projects should not be invested in and, secondly, it has a direct impact on the capacity of those types of projects to go forward in our own local economy.
There are projects in the ACT that have previously been supported by the CEFC, and there are many more that we know are to come, particularly in medium-scale rooftop solar generation. Even the Western Australia Treasurer understands the importance of the growth in medium-scale rooftop solar generation and the potential economic transformation that can occur from that, but the federal government is not interested. It is basically saying that it is not a reliable investment and it should not be happening.
At the same time they are sending all of these messages, they are also telling the CEFC that it must continue to get an economic return on its investments comparable to what the private sector gets. They are saying, “Don’t invest in technologies that will deliver that return, but we still expect you to get that return and pay the dividend back to the federal government.” It is an absurd position. It is a position that is undermining investment in our local economy and in the renewable energy sector, solar and wind more generally.
Ms Lawder continued to talk about how great it is that the 33,000 gigawatt hours of renewable energy generation under the revised renewable energy target is going to
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