Budget could delay renewable energy projects

AAP Newswire
Wednesday 14/5/2008

CANBERRA, May 14 AAP - A budget decision to defer spending on renewable energy could delay "hot rocks" projects, which use geothermal energy to produce low-emission electricity. John Connor, CEO of the Climate Institute Australia research think-tank, said several projects were looking for funding in 2008-09 but the Rudd government's first budget did not commit funds for renewable energy until later. The budget prioritises spending on clean coal in the next few years, pushing most renewable funding back to the post - 2012 period.

Some green groups are unhappy with the decision. "There are a couple of clouds over the budget in terms of question marks over funding for renewable energy initiatives in the coming financial year," Mr Connor said. "There (are) some concerns particularly amongst the geothermal, which is the hot rock, sector there, where they did have plans on the books for this coming financial year." The Climate Institute Australia is chasing the government to see how the hot rocks projects might be funded.

Mr Connor welcomed some aspects of the budget, describing it as a "mild but promising" start for clean energy reform. There were good initiatives for solar power, he said. The slow start to renewable energy funding should be kept in perspective - there were not many projects which were far enough advanced to seek funding in the near future.

And the establishment of an Emissions Trading Scheme in 2010 - which puts a tax on carbon emissions - would likely be a huge boost to renewable energy funding. Mr Connor said $10 billion might become available each year through the sale of ETS permits so clean energy funding would be a "whole new ball game." Some green groups have criticised the budget for taking away the $8,000 rebate for solar panels from households earning $100,000 or more, but Mr Connor said it was fair to introduce a means test.