Praise for policy leadership on clean energy, renewables and trading

01 Jul 2011Archived News Energetics in the News

PUBLISHED: Carbon & Environmental Daily - The weekend's clean energy package has won widespread endorsement from experts in emissions trading, renewable energy and energy efficiency.

The $23 starting price is "fairly much in line with historical averages" on international markets, head of Baker & McKenzie's global climate change practice, Martijn Wilder, said.

"More importantly, you need to have that price to drive change, and those industries that are significantly adversely affected are protected in any event," he said.

The billions on offer to support clean energy and other elements of the package will quickly trigger "significant investment" in renewables, innovation and the land sector, Wilder told CE Daily.

It will give Australia the opportunity to take a leadership role in developing green technologies, alongside nations such as Korea, China and Germany, which are already really pushing growth in these technologies, he said.

'Trumps' UK Green Bank proposal, Norton Rose says

"What is really exciting is that the Australian policy trumps the UK's $4.8 billion Green Investment Bank some three times over," according to Anthony Hobley, global head of climate change and carbon finance with Norton Rose.

"If you look at the different bodies and funds put together there is some $15 billion available for clean energy, renewables, clean technology and energy efficiency," he told CE Daily.

With that sort of financing, Australia is well-placed to give countries such as Singapore "a run for their money" in efforts to become the regional hub for climate finance, he said.

Hobley also welcomed measures in the package to ensure only "quality" carbon offsets are imported and used in Australia.

"They've put in quite rigorous provisions about quality and the market integrity of the offsets," he said.

They've also dovetailed these very closely to European controls – for example, by citing EU guidelines on credits sourced from large-hydro projects – a move which helps to keep transaction costs down for buyers and sellers, he said.

The 50% cap on the use of international carbon credits to meet domestic liabilities is very high and "in practice is symbolic, rather than meaningful", he added.

Deal will end years of under-investment

Asked about the Australian market's capacity to process $10 billion in support for clean energy investments through the Clean Energy Finance Corporation, Clean Energy Council strategy director Kane Thornton told CE Daily that "we've known for quite a while that we've been effectively under-investing in a whole range of early-stage renewable energy technologies".

There are many Australian companies well-placed to take advantage of the funding, he said.

"We also know it will attract international investors and companies," he said. "They'll now see Australia as somewhere they can come and invest … and prove their technologies," he said.

Thornton added that while $5 billion of the CEFC's $10 billion is earmarked for renewables, the other $5 billion is for a broad range of clean energy projects, including renewables.

Efficiency scheme provides additional revenue stream

Energetics principal consultant Peter Holt welcomed the energy efficiency components of the package, but cautioned that they only provided an outline of proposed arrangements.

"There is a lot more policy work to be done in the background to unpick what their energy efficiency measures actually mean, in a business context," he said.

Holt said the prospect of a national energy efficiency scheme would give many businesses the chance to obtain additional revenue by creating tradable certificates through activities that improve their energy efficiency.

The Government's decision not to set a national aspirational goal to improve energy efficiency is not a concern as the concept "is so vague anyway it has limited meaning", he said.

Holt also welcomed the commitment to continue and expand the Energy Efficiency Opportunities program.

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