ARENA may defy Lib-Nat govt over funding

It would seem there’s more trouble in the wind, pardon the pun, for the conservative Liberal-National government with another renewable energy authority saying it may have to defy the government if its funding is cut in next week’s federal budget.

Chief executive of the Australian Renewable Energy Agency (ARENA), Ivor Frischknecht, has indicated that his organisation may find itself forced by legislation to operate in defiance of the government if its funding is cut.

In a speech to the Australian Solar Council’s 52nd annual conference in the Victorian state capital, Melbourne, Mr Frischknecht pointed out that ARENA was required to continue its work under the legislation that enabled its existence.

He also made it clear that in ARENA’s opinion the Australian government’s Commission of Audit had a wrong impression of ARENA’s role and scope.

In its report to the government last week the Commission of Audit recommended that ARENA be dissolved and its activities rolled into the Department of Industry.

Mr Frischknecht said: “On this basis I feel it’s important to correct the Audit’s observation that ARENA duplicates the work of other organisations or programs.

“No other agency supports projects along the commercialisation pathway from basic laboratory research to large-scale pre-commercial activities.

“No other agency generates both the technology push and market pull that will ultimately deliver the most prospective renewable energy technologies to market.

“And while ARENA aims to increase the use of renewables in Australia, we do not subsidise the use of commercial renewable energy technologies like the Renewable Energy Target.”

Drawing attention to the possibility of ARENA’s funding being cut in next week’s budget Mr Frischknect said: “Our mandate, to improve the competitiveness of renewable energy technologies and their uptake, is spelt out in the ARENA Act.

“Our agency was provided with $3.2 billion to carry out this mandate, although governments past and present have since signalled their intention to reduce that funding to around $2.5 billion.

“The current fiscal environment is tight, and the Government has made it clear that it will deliver a tough Budget next week.

“ARENA will no doubt be expected to do its share of the heavy lifting and we anticipate next week’s federal budget will bring further cuts.

“It’s important to note however that none of the cuts will take effect until the ARENA Act is amended by Parliament.

Mr Frischknecht said these announcements did not affect ARENA’s funding for the current year, or funding for the 181 projects already underway.

ARENA’s funding and scope extended to 2022, which made it unique in Australia and possibly the world.

The government had made clear why it was vital that Australia looked to the future when making today’s policy and investment decisions.

He said that was to ensure investments were made that would best equip Australia to be economically prosperous and globally competitive in the future.

“That is exactly what ARENA is positioned to do,” Mr Frischknecht said.

“In particular ARENA is set up to help technology proponents secure financial backing over timeframes that are longer than usually acceptable in the commercial market.

“We are helping to address this market failure by strengthening investor confidence and the bankability of the most promising technologies,” he added.

Mr Frischknecht also gave a ringing endorsement of Australia’s advances in solar energy saying “Around 60 per cent of our $1 billion of committed funds support 140 solar energy projects, research fellowships and PhDs out of our total 181 projects.

“Looking at the impressive gains that solar has made over the past few years, we must nevertheless resist the temptation to assume the hardest work has been done,” he added.