Parliament gridlock threat to geothermal industry

Adelaide Advertiser
Saturday 20/11/2010 Page: 90

THE fractured nature of the current Federal Parliament is the biggest threat to funding for Australia's geothermal industry, an Adelaide conference has been told. Senator Don Farrell, representing Energy Minister Martin Ferguson, said a lack of agreement on carbon pricing was likely to sap funding for the developing industry.

"As the last Parliament showed, even with the most determined approach it is very difficult to get consensus in the Federal Parliament on questions of carbon pricing (and) therefore emission reduction targets", he said. "I'm not sure that given the current state of Parliament - where the Government is both on a knife edge in the Lower House and in the minority in the Senate - that it is going to be very easy to achieve that goal. "That presents problems for this industry. The way you access finance for this industry is by a price on carbon, that's going to make your industry the most valuable in terms of interest from finance organisations".

Mr Farrell said South Australia remained a hothed for the industry, which provided a real prospect for "24/7 baseload renewable power". Yesterday's Australian Geothermal Energy Association conference was also told it had been a "frustrating year of inaction" for research and development incentives. KPMG partner Mathew Herring said there had been no new progress on funding incentives and there was an expectation that tax changes were likely to be delayed until next financial year.

"We were close to having a new research and development regime in place that would benefit the geothermal industry, but it's been a frustrating year", he said. "We don't know what's happening and there may be some good opportunities forgone". Mr Herring said changes proposed extending the turnover threshold for R&D expenditure from $5 million to $20 million but tightening the definition of R&D to reduce production-related claims. He said details of a $40 million emerging technology fund - together with associated $100 million in venture capital funding - were still uncertain.