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Australia ends Abbott's war on wind farms as funding ban lifted

Sunday, December 13, 2015 - 21:42

[MELBOURNE] Australian Prime Minister Malcolm Turnbull lifted a ban on government investment in wind power introduced by predecessor Tony Abbott, in another policy shift that coincides with a global climate-change deal to curb fossil-fuel pollution.

Environment Minister Greg Hunt issued the state-backed Clean Energy Finance Corp with orders cancelling Mr Abbott's directive which prohibited the A$10 billion (S$10.2 billion) ($7.2 billion)renewable energy fund from investing in new wind power projects, according to a Dec 3 investment mandate obtained by Bloomberg.

The fund can now invest in any clean energy project, including wind, that involves "emerging and innovative" technology, according to the document. The government has directed it to focus on offshore wind projects, given that funding of established onshore technologies may be met from commercial sources.

"The new CEFC investment mandate reflects the Turnbull government's strong support for renewables and innovation," Caitlin Keage, a spokeswoman for the prime minister, said in an e-mailed statement. "The mandate puts the CEFC's focus on new and emerging renewable technologies, rather than supporting well established technologies that are financially viable without government support."

It's another policy reversal by Mr Turnbull, who deposed Mr Abbott as Prime Minister after a leadership ballot of the ruling Liberal-National coalition in September. He last month scrapped a system of bestowing knighthoods on prominent Australians which was reintroduced by Mr Abbott, and in October signalled his intention to reform the nation's tax system, including a debate on increasing the goods and services tax.

Wind farming in Australia suffered a setback when Mr Abbott, who had labelled wind farms as ugly and noisy, said in July that the Clean Energy Finance Corp should be "investing in new and emerging technologies and certainly not existing wind farms". The government had outlined plans the previous month to appoint a commissioner to oversee wind farms and back research into whether they damage people's health.

The mandate also honours commitments made to crossbench senators during negotiations to secure changes to the Renewable Energy Target, Mr Turnbull's spokeswoman said. In June, the Parliament certified a new target of producing 33,000 gigawatt hours of electricity from large-scale renewable energy projects by 2020, after months of lawmaker disagreement.

Negotiations at the United Nations climate summit in Paris came to a head on Saturday as envoys from 195 nations endorsed a package of measures to limit fossil-fuel pollution, establish a mechanism to step up the reductions for decades, set an ambitious goal to curb temperature increases and set up ways to measure and verify emissions.

Wind accounted for almost a quarter of the Australian fund's investment portfolio as of last year and about one-third of its project proposals relate to wind technology, according to its website.

The corporation has acted as a debt provider with other lenders for wind projects including the AGL Energy Ltd-operated Macarthur wind farm in Victoria state, it said.

Plans to change the fund's investment mandate were reported earlier by The Sydney Morning Herald.

BLOOMBERG

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