ARENA Cuts Impact Renewable Energy Businesses
Wednesday, 21st September 2016 at 9:46 am
Business investment in Australia’s renewable energy sector will take a direct hit, with up to $5 billion of private funding at risk, as a result of the federal government’s decision to cut half a billion dollars from the Australian Renewable Energy Agency.
Future Business Council executive director Tom Quinn said the government’s decision to cut funding to ARENA in the budget savings bill could have run-on effects on matched private-sector funding for renewable energy.
ARENA was saved from a worse fate, with the Coalition originally planning to strip $1.3 billion from the agency. Negotiations with the opposition secured $800 million in funding over the next five years.
But Quinn said the damage to the renewable energy sector would still be significant.
“The cuts to ARENA are shaking business confidence even further in the renewable energy space. This is a boom sector of this century, Australia’s got natural advantages in this space,” Quinn told Pro Bono Australia News.
“But the one thing holding back the industry is policy uncertainty created by hostile government actions.”
He said demand for renewable energy technology was “enormous”, with $329 billion invested globally in the sector last year.
But he said the role of ARENA was critical in launching renewable startups, growing viable businesses, and attracting local and international investment.
“If we’re talking about innovation in any new technology then early stage investment is critical, and that’s really where government comes in. Government has the ability to invest where the private sector can’t, and all too often that’s where Australia has let down its innovators and entrepreneurs,” he said.
“We haven’t got a good track record of backing early-stage innovation, and this is where ARENA was critical.
“We often talk about the brain drain and some of Australia’s best and brightest heading overseas to set up, and it’s because they can’t access that early stage investment in innovative ideas.”
Quinn said ARENA was one of the “bright lights on the horizon” for Australia’s innovative and entrepreneurial community. He called on the government to expand funding to the agency.
“We’d like to see the funding not just restored to ARENA but doubled. It’s original budget of $1.3 billion was good, but that’s just the beginning,” he said.
“We really should be increasing it because there is immense demand, there is hundreds of billions of dollars being spent every year internationally on renewable energy.
“For Australia to claim our share of that investment we need to be investing locally so we have globally competitive companies.”