CEFC Wind Power Investment “Ban” Reversed

CEFC - wind powerTurbine Image: BigStock

Australia’s Environment Minister, Greg Hunt, has apparently informed the Clean Energy Finance Corporation it can invest in new wind power projects with the Federal Government’s blessing.

The Sydney Morning Herald reported yesterday the decision is the latest in a series of changes Prime Minister Malcolm Turnbull has made to ex-Prime Minister Tony Abbott’s policies.

In June this year, the then-Abbott Government directed the Clean Energy Finance Corporation (CEFC) to stop investing in wind energy and some solar power projects after previously attempting and failing to axe the CEFC altogether.

Mr. Abbott’s views of wind turbines is well known – he has publicly stated they are “visually awful, they make a lot of noise”. It’s thought this perception was formed by Mr. Abbott’s experience with a single wind turbine. Ex-Treasurer Joe Hockey also said wind turbines are “utterly offensive” and  a “blight on the landscape”.

The so-called “ban” imposed on the CEFC with regard to wind power was very controversial as it was based on what seemed to be flawed understanding of the CEFC’s mission and attempted to interfere with the organization’s legislated activities; i.e. the government was overstepping its mark.

Contrary to what some of its opponents have indicated, the CEFC does not give away “free money” to renewable energy projects, it invests in them and expects a return. The organisation also gives attention to more mature technologies rather than new ones.

“The CEFC focuses on projects and technologies at the later stages of development which have a positive expected rate of return and have the capacity to service and repay capital,” say the Corporation’s web site.

In short, it attempts to pick winners and minimizes investment risk.

As at June 30 this year, the CEFC had made $1.4 billion in investment commitments in projects with more than $3.5 billion in value.

In October, Prime Minister Malcolm Turnbull offered what appeared to be his party’s reluctant acceptance the CEFC wasn’t going anywhere.

“.. it was the government’s policy to abolish it because we do not support government banks for the simple reason that new government banks are performing roles that can be perfectly adequately fulfilled by the private sector and are not necessary,” said the Prime Minister.

“The question is whether it is necessary or an appropriate use of government money. But it is there, it is operating, it is well run, it has a good board, it has a good chief executive.”

Both Victoria and South Australia’s Environment Ministers have welcomed the news; as has wind tower manufacturer Keppel Prince.

The Greens also welcomed the announcement, but said any threat to both the CEFC and the Australian Renewable Energy Agency (ARENA) must be totally removed, particularly after the outcomes of the COP21 climate conference in Paris.

“The Turnbull government must take the Clean Energy Finance Corporation (CEFC) and the Australian Renewable Energy Agency (ARENA) off the chopping block,” said Australian Greens Leader Richard Di Natale.