From Giles Parkinson at Crikey today:
Clean energy and low-carbon investors are abandoning Australia as the new federal government, and its conservative colleagues at state level, turn their interests and policies away from renewables and long-term carbon abatement incentives.
Several key players in the clean energy finance industry have told the Senate hearings into the proposed Direct Action policy that investors are looking to Europe, the United States and some South American countries to find low-carbon opportunities. Nathan Fabian, head of the Investor Group on Climate Change, said:
“My members are looking at the United Kingdom, Ireland, the United States, France and some South American countries as having more stable investment environments for low-carbon opportunities. Direct action is not an investment grade policy.”
…Tim Buckley, a former Citigroup chief analyst in Australia, clean energy funds manager, and now with the US-based Institute for Energy Economics and Financial Analysis, told the same hearing that the Australian clean energy industry was regressing because of the lack of clarity on policy:
“We are worse than stalling; we are actually investing in assets that I think will become stranded as a result. Internationally, companies and economies are building industry capacity to transition for the long term. We should be building capacity as well and we are not doing so.”
He said Australia was missing out on hundreds of billions of dollars being invested every year in renewables, in energy efficiency and in development of these new technologies, and the hundreds of thousands of jobs being created in China, Germany and in America.
Perfect timing for the capex cliff and it doesn’t stop there. The major reason that electricity prices have been rising so fast in the past few years has been the huge investments made by the public corporations that transmit the electricity across space (polls and wires). These investments have, in part, been driven by guaranteed rates of return that encourage a certain amount of over-investment.
Following the over-investment, those rates of return have been cut or are in the process of being so and the investment is set to decline significantly:
Add in falling end-user demand and a glut at the wholesale generation level and the local energy sector is going to be retrenching investment just as our externally facing one is. I suspect as well that because it’s not private investment it is probably not picked up by the ABS capex survey either.
It all adds up to less jobs.
