Bid to go local on energy funding

Australian
18 August 2011, Page: 6

THE peak union body is demanding that Julia Gillard's government quarantine billions of dollars of her clean energy program to help local manufacturers. The ACTU wants the government to introduce local content policies, to be set by cabinet, on certain projects able to tap government grants and finance under the government's carbon tax package.

But the policy, which if adopted could prove a blow to companies that have invested here such as Denmark's Vestas and Spain's Acciona Energy, is opposed by overseas clean energy investors. The ACTU is insisting that the policy be applied to the $1.2 billion clean technology program, which will give grants for research into low-pollution technologies and energy-efficient manufacturing.

It also wants it applied to the $10bn Clean Energy Finance Corporation, which will provide loans and equity investments in renewables such as geothermal and other clean energy technologies. ACTU president Ged Kearney said investments in local jobs and industries were an "important part" of the carbon pricing move. "Australian industries are innovative and have the initiative to drive investment in clean energy technologies. We just need to ensure that all Australian businesses are given an opportunity to be apart of this process". she said.

A spokesman for Climate Change Minister Greg Combet said it was premature to comment on this call as legislation and guidelines for the programs had not been finalised. Last night, Minister for Innovation, Industry, Science and Research Kim Carr said the government's position was to have Australian industry programs for project tenders worth more than $20 million and it was developing "specific guidelines for green technology programs". "There will be consultation on the guidelines in the coming months", Senator Carr said.

The ACTU has also criticised the $1.5bn solar flagships program for not including plans for local industry on the grounds that the program involved grants rather than tenders. Investors in the Moree solar farm, which is receiving money under this program, include Fotowatio Renewable Ventures and BP Solar both of which are based in Madrid and Australia's Pacific Hydro.

But last night, Vestas said it was opposed to local content requirements. "Such policies decrease competition, inhibit innovation, reduce economies of scale, and raise costs", said Vestas Australian Wind Technology director of policy and government relations, Ken McAlpine.

"We believe that governments would be able to attract more participation from wind power companies in their respective countries by shifting the focus from local content requirements to building local capabilities, a sound investment climate and competitiveness". Clean Energy Council director Kane Thornton said local content rules were not necessary and Australia was lagging behind China, Germany and Denmark in solar panels and wind turbines as a result of past industry policy.