Billions of dollars in funding for new energy infrastructure and ‘low emissions’ technologies promised by the Morrison government has effectively evaporated, with key legislation lapsing after the election campaign was called.
The 46th Parliament of Australia officially ended on Monday, with the Governor-General moving to dissolve parliament ahead of the federal election on May 21.
It sees the Morrison government end the parliamentary term without passing several of its promised reforms or governance regimes, and failing to pass legislation establishing long-promised funding initiatives to boost investment in new energy infrastructure.
For example, proposed legislation to establish the Morrison government’s $1 billion Grid Reliability Fund lapsed on Monday, without ever being put to a vote in parliament.
It means dozens of proposed energy projects will remain in limbo without ever securing the funding promised to them by the Morrison government.
The Grid Reliability Fund was first announced in 2019 to support the construction of new grid infrastructure and new dispatchable generators, including through policies like the Underwriting New Generation Investments (UNGI) scheme.
The Morrison Government also intended to use the Grid Reliability Fund to honour commitments to fund new energy projects included in a number of bilateral agreements struck with state governments.
Federal energy and emissions reduction minister Angus Taylor introduced proposed legislation to establish the Grid Reliability Fund in August 2020.
At the time, Taylor said the UNGI scheme would be necessary for boosting electricity system reliability and lowering electricity prices.
“The UNGI program will deliver new reliable generation into the market, putting downward pressure on prices,” Taylor told parliament.
“The upgrades to the infrastructure and transmission lines will unlock more power and underpin reliability as ageing generators exit the system.
“This will not only increase energy market competition and supply but also improve reliability by increasing the level of firm capacity in the system.”
The attempt to create the Grid Reliability Fund was effectively hijacked by disgruntled members of the Nationals, including now deputy prime minister Barnaby Joyce, who wanted the Grid Reliability Fund to be used to support coal and nuclear projects.
Taylor was forced to stall the passage of the legislation to avoid the spectacle of Nationals MPs crossing the floor on Coalition government legislation. The legislation was never reconsidered for debate throughout the remainder of the parliamentary term.
Due to the failure to actually establish the Grid Reliability Fund, there is no means for the government to deliver promised funding support.
In March 2019, Taylor had announced a shortlist of twelve projects earmarked for funding through the UNGI scheme. This shortlist included a number of new gas-fired generators and pumped hydro energy storage projects that were supposed to boost the amount of dispatchable generation capacity in Australia’s electricity markets.
Without the promised ‘underwriting’ support, none of the twelve projects have eventuated.
Likewise, a $500 million Low Emissions Technology Commercialisation Fund, which the Morrison Government announced with great fanfare during the COP26 climate talks in November, has also failed to eventuate.
The Low Emissions Technology Commercialisation Fund was supposed to attract an additional $500 million in private sector funding to invest in the research and development of new emissions reduction projects.
Using the model of the Clean Energy Finance Corporation, the ‘low emissions technology’ fund was supposed to invest in new technologies capable of generating a positive financial return.
At the time, prime minister Scott Morrison and Taylor had promised that “the government will introduce legislation to establish the Fund in this term of Parliament.”
It never did.
A further $192.5 million in funding allocated to the Australian Renewable Energy Agency, to fund a range of transport efficiency and microgrid programs, as well as the Morrison government’s ‘Future Fuels Fund’, also faces uncertainty after the government opted not to legislate the funding.
In that instance, the Morrison government sought to direct ARENA to administer the programs through regulations. These controversial regulations could extend the renewables agency to funding non-renewable technologies like carbon capture and storage projects, and blue hydrogen.
The regulations have been cancelled out twice by parliament, as they are likely to be unlawful. A third set of regulations, issued last month, may not even be workable.
In March, the federal budget showed spending on climate change action falling each year for the next four years, under the Morrison government.
The Morrison Government has, however, spent more than $31 million on taxpayer-funded advertising, claiming credit for Australia’s investments in new renewable energy and low emissions technologies.
