Essay by Eric Worrall
What if all the private money they’ve modelled fails to show up?
$500m to establish Powering Australia technology fund through the CEFC
23 November 2022 4:02pm
The Australian Government is investing $500 million in the Powering Australia Technology Fund to help businesses progress innovative projects and technologies to reduce emissions.
This funding will be provided to the Clean Energy Finance Corporation (CEFC) and will boost commercialisation of innovative clean energy technologies.
The fund aims to leverage off another $500 million from the private sector. It will include a ‘growth capital’ offering for clean energy technology businesses looking to expand.
Through amendments to the Clean Energy Finance Corporation Act, as part of a Treasury Amendment Bill, the $500m will be added to the CEFC Special Account and the details of the fund will be included in the CEFC’s investment mandate.
State Governments are also desperately shovelling money into the pot, though in Victoria’s case, they’re being a little more obvious about it.
‘Perilous journey ahead’ under Victoria’s energy overhaul
Clean energy investors have warned of an investment drought and large energy users say their survival will be threatened unless the Victorian Labor government gets its radical plan to revive state ownership of electricity supply exactly right.
Big industry fears they will be slugged with higher prices and be forced to take on more risk under the plan by a re-elected Andrews government to revive the State Energy Corporation to invest, own and retail renewable power.
The fears voiced by the group representing companies such as Brickworks and Bluescope Steel came as major renewables investors said they won’t invest the tens of billions of dollars required to meet Victoria’s proposed 95 per cent renewables target for 2035 if they are disadvantaged in any way against the new state player.
Private investors could face being squeezed out of new investment in energy under the plan, which the industry super sector – which would co-invest with the SEC – lined up to back. Morgan Stanley labelled the plan “a net negative” for major suppliers AGL Energy and Origin Energy.
My question, if renewables are such an attractive investment, why is there an ongoing need for State and Federal governments to keep pump priming the pot with taxpayer’s money?
In my opinion the desperate political effort to pump prime the green revolution is strong evidence that the green energy revolution engine is refusing to start.
As the Vestas and Siemens graphs at the top of the page show, renewable energy investment is not exactly soaring. Vestas closed three turbine manufacturing factories in 2021.
That green investment slump could be about to get a lot worse. US Republican Jim Banks (R-IN) just promised to defund Biden’s green revolution.
Without government money, the only way renewables can prosper is if they actually are cheaper than coal. Do I need a /sarc tag?
Holdouts like Australia and California might stumble along for a while, burning down their children’s future in a futile attempt to realise their impossible green energy dream. But in the end they, like everyone else, will succumb. Governments can only defy the laws of economics for so long, before the gravity of financial distress brings their green fantasies crashing back down to Earth.
I expect to see a lot of abandoned wind farms and solar farms in the next decade. Please post any links to photos you have personally taken in comments, along with a description of the location in the photo. Please make it clear if you are happy for me to use the photos. I’d like to use such photos, with acknowledgement, in future WUWT articles about the death of the renewable industry.