New body to control clean energy grants: Details of compromise deal emerge

Age
5 July 2011, Page: 6

RESPONSIBILITY for handing out about $1 billion in clean energy grants will be taken out of government hands under a compromise with the Greens as part of a carbon price deal to be announced on Sunday. The Age has learned that clean energy programs such as the $1.5 billion solar flagships program designed to help build Australia's first large solar plants will be removed from Energy Minister Martin Ferguson's control and run by an independent statutory body.

As previously reported, a separate "clean energy finance corporation" will also be created to oversee up to $2 billion a year in seed funding loans for projects trialling large scale renewable energy technology. The steps are part of a compromise deal between Labor, the Greens and independent MPs Tony Windsor and Rob Oakeshott.

It is understood it will include a multimillion dollar tender round to buy out and shut down about 2000 MWs in brown coal power generation an offer that is expected to interest the owners of the Hazelwood power station and Yallourn W power station in the Latrobe Valley. There will be compensation packages for households, surviving coal plants, export industries, coal miners and manufacturers.

The new statutory body running clean energy grants is expected to take over responsibility for some of the $5 billion clean energy initiative announced in 2009, including the remaining $730 million in solar flagship funding. Prime Minister Julia Gillard last night released a statement saying cabinet had agreed that enough progress had been made for the carbon price scheme to be announced on Sunday, though it was yet to sign off on the details.

The multi party climate committee will meet again before cabinet gives final approval. Earlier, Ms Gillard refused to say which industries would face increased transport costs due to a carbon price, but repeated her promise that ordinary motorists and small business would not face higher petrol costs. Ms Gillard said Opposition Leader Tony Abbott had been "caught out misleading the Australian community" by repeatedly claiming that a carbon price would increase the cost of petrol by six cents a litre.

Mr Abbott responded that the government was "dribbling out" what it thought was good news, but warned the carbon tax would be a "quagmire of complexity" for business. The Public Transport Users Association warned that a carbon price could penalise public transport users if electricity and fuel for trains, buses and trams became more expensive while petrol was excluded.

It is understood the deal between Labor and the Greens includes an agreement to start work on a national scheme that would force energy retailers to help customers cut energy use. If successful, it would require retailers to offer household audits and hand out energy efficient products to help consumers cut power use by up to 3% a year.