Greg Hunt, the Coalition's Climate Action shadow minister, stated at a solar conference today that the Coalition would be making announcements surrounding the Australian Renewable Energy Agency's (ARENA) ongoing arrangements in the lead up to the election. In addition he re-confirmed that the Coalition would seek to back-out of any contracts the Clean Energy Finance Corporation (CEFC) might enter into prior to the election.
ARENA's funding at present is explicitly specified via dedicated legislation. In addition this legislation specifies that any unspent funds are rolled over into subsequent years. This is intended to provide ARENA with a degree of independence from government's annual budget deliberations, although in the recent May budget $370m was deferred to later years.
In addition the ARENA legislation sets out that the organisation is governed by its own board of directors who set the direction on how ARENA allocates funding to renewable energy projects and research.
The Coalition supported the passage of the ARENA legislation, so the fact that they might wish to make an election announcement about ARENA suggests changes might be under consideration. When Hunt was asked what this announcement might contain he said he couldn't comment as it was a policy matter for Shadow Energy Minister, Ian Macfarlane. In addition he wasn't willing to confirm or deny that there might be changes to funding arrangements for ARENA.
Hunt also restated that the Coalition would seek to withdraw any funding committed to by the Clean Energy Finance Corporation unless the allocated funds had already been spent by the project proponent.
CEFC CEO Oliver Yates was subsequently asked whether he could provide any reassurance to project proponents that any funding they might procure from the CEFC would be secure. His view is that governments in Australia have always been highly reluctant to break contracts that highten perceptions of sovereign risk and undermine investor confidence. In addition, just like any other commercial arrangement in Australia, there is a clear legal path for compensation where one party breaches a contract.
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