How the IPA poisons renewable energy policy in Australia

The hardcore right-wing IPA hates renewables.

The hardcore right-wing IPA hates renewables. We love renewables (and beer).

Ever wondered why our government is so quick to destroy clean energy initiatives? Why the great work of agencies such as ARENA is ignored? How the green sector rarely gets a look in when it comes to energy policy? One clue as to the source of this ‘slash-and-burn’ mentality may lie in the influence of a powerful think tank called the Institute of Public Affairs (IPA). This week we’ll peel back the extent of that link and examine the power of the IPA in renewable energy policy.

In a May 31 article, The Saturday Paper’s Mike Seccombe showed that last month’s draconian Budget was not a bitter pill for all sectors of the Australian economy. Some did very well thank you very much. These included the big food, pharmaceutical and fossil fuel energy sectors, to name but a few. One of the big losers was the renewable energy industry.

However in analysing the budget in more depth, Seccombe suggests that one organisation had its shopping list not only satisfied but (cynics may say) helped drive the policy behind the document. This is the Institute of Public Affairs (IPA). As well as getting their way on issues such as Medibank, the NBN and the mining tax, the IPA has had another big win on behalf of its members: Having its anti renewable energy measures taken up by the government.

The IPA bill themselves as the world’s oldest right wing think tank and date back to the founding of the Liberal party. Their reason for existence has always been to lobby and represent the interests of their members: usually big business, media moguls, banks and oil and mining companies. They occupy the extreme economic rationalist wing of Australian political opinion with support for unfettered deregulation, free trade deals, increased centralisation of media ownership and the slashing of funding for public institutions such as the ABC.

They also list energy policy as one of their key areas of interest.

But why does the IPA oppose renewable energy? One look at their website shows the IPA to be bitterly opposed to any forms of support for the sector. Their publications and opinion pieces in newspapers follow the familiar anti-renewables message (download their submission to the Renewable Energy Target Review Panel here for a look). This isn’t surprising given their main funding source. While extremely secretive about the origin of their funds, the think tank has previously admitted receiving funds from companies such as Caltex and Esso, according to Seccombe. Throw in support from Rupert Murdoch and Gina Rinehart and you have the main players behind the anti green energy stance.

Any key government initiatives such as the establishment of the highly successful Australian Renewable Energy Agency (ARENA) is viewed as a threat to IPA members. By attracting funding from overseas and the private sector, ARENA is proving itself a success story in investment and research and development in projects such as the CSIRO Newcastle solar thermal breakthrough. ARENA’s positive work therefore runs counter to the interests of the fossil fuel-supporting IPA and must be undermined at all costs.

More evidence of the IPA’s power emerged with this week’s revelations that a senior minister was forced to backtrack over the Coalition’s solar energy policy. The sorry tale of intrigue and embarrassment may reveal the full extent of the think tank’s influence.

According to the Sydney Morning Herald, Environment Minister Greg Hunt was forced into a humiliating backdown after announcing the government’s full commitment to the “one million solar roofs” program without the permission of the PM’s office.

Here’s what The Hapless Hunt told the Clean Energy Council in a November 29 presentation.

”The government will provide $500 million for the 1 Million Solar Roofs program,”
And a further $50 million each,”… to ”the Solar Towns and Solar Schools programs”.

”Each of these three new programs is being prepared for implementation and will commence in the 2014-15 financial year,” he promised.

Senior colleagues, understanding the PM’s (and I suggest the IPA’s) vehement opposition to government support for renewable energy programs, forced the embattled minister to backdown on his promise. He was forced to beat a bitter and cold retreat, an exit from relevance from which he has never really recovered.

The fact that the IPA’s line influence the PM and his senior colleagues over a senior Cabinet minister may well give you an understanding of how pervasive — and dangerous — the influence of the IPA is in regard to our present government.

Agree? Or do you think the influence of the IPA in renewable energy policy is perfectly benign and legitimate? Please have your say.

 

Comments

  1. Colin Spencer says

    If Solar energy was economically viable, why does it need millions of dollars of taxpayer’s money to proceed? If solar had commercial potential, capital investment would always be available to develop and bring it to market. The problem with public money being thrown at these projects is that it gives no return. In the end, any project that requires “free money” to exist, must inevitably fail when governments get sick of throwing good money into a bottomless pit. I have invested in a 56 panel system myself, knowing full well that I will have retired and moved on before it has any hope of delivering a reasonable return on investment. I just wish I could get a clever battery system to complement what I have got, and go virtually free of the grid. I am not anti-solar at all, but I can see that it just doesn’t stack up as a good investment. Yet.

    • Finn Peacock says

      Renewables are high capital cost, zero fuel cost, and almost zero cost to society in terms of environmental damage (externalities). They are competing with power plants that are low capital cost and high fuel cost and huge costs in externalities. Mechanisms like the RET, at no cost to the budget, provide support for them to get over this finance hurdle, and reduce harm to people and the environment.

      And let’s not pretend that fossil fuel is not subsidised!

      There are a gazillion examples of commercial and residential solar systems that are producing a return of 30% plus. If you remove the STCs from the capital cost then the return may drop to 15% or so. Still a pretty good low risk investment compared to almost any other investment I can think of.

      We have a target. It works well. It can be met. Cutting it doesn’t save anything. We need to stop polluting the atmosphere. So what’s the problem?

    • Jeffrey L says

      @ Colin
      as you say if Solar Energy was economically viable,why does it need millions of dollars of taxpayer’s money to proceed?

      My Answer to that is that it is good business on the fact that the government is already charging us a penalty tax for the environment, why not use that money and put it back to the user so that they can at least help generate power instead of just taking environmental tax off us.

      if you have a 55 panel system on your home then you can have a battery system on your home, start searching and you will soon find people that are right into stand alone systems.

    • Archie Burke says

      If Australian renewables say worked on by CSIRO,were given $400 million per year (like coal gets “to produce CLEAN COAL”) they could probably come up with a battery that you could run everything on for say six weeks without any solar input,of course we will never go without sun for anything like that period,so you would have your base power input 24/7.But those who have mega shareholdings in coal/oil mining will never allow this to happen! Imagine if these dudes owned the gas power & candlestick factories back in the 1920s? We would never have graduated to ELECTRICITY!

  2. bensab3Rhona Eastment says

    Colin you offer a very narrow line of thinking . There are many other reasons to continue to finance renewable energy. Before long these new industries will be self-supporting, whilst continuing to reduce dangerous carbon pollution. If we continue with fossil fuel dependence, not only will we have high health costs but we will lose potential international markets and 000s jobs already created here. Renewable energy is the future, Aust. Is slipping backwards.By the way, in your deliberation on this matter, did you factor in the billions of $s Govt gives to fossil fuel industry?

  3. The new solar farm opening in the ACT is the classic example of why government subsidy is a good thing. ACTEW are slugging everyone with a 15% rate rise to “pay for the new farm” whereas in fact the cost of providing the power will be cheaper over time. Higher government subsidy would reduce this slug on the consumer. And of course better uptake of big solar would reduce the reliance on fossil fuel and the Snowy Hydro.

  4. Can the IPA please concentrate on the most important task – allowing foreign bananas onto Australia shores. Aussie bananas suck yo!

  5. Rich Bowden says

    The German model of reducing subsidies gradually would seem to be a sensible approach Colin. That way the sector could benefit from certainty while it was developing, while not being a drain on the public purse forever. By the time the subsidies have been withdrawn, the renewables industry has the capacity to stand on its own feet. This “boom and bust” mentality at present would appear to be doing more harm than good. I agree though, better battery storage is going to be the real gamechanger.

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