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Greens' Gains Spark Hope for Australian Clean Energy (Update1)
2010-08-23 06:18:11.237 GMT
(Adds comment from Petratherm in fourth paragraph.)
By James Paton
Aug. 23 (Bloomberg) -- A surge in voter support for the
Australian Greens spurred optimism that the government may
increase funding to renewable energy projects and impose a price
on carbon emissions to combat climate change.
"Any government would ignore that at their peril,"
Michael Ottaviano, managing director of Perth-based Carnegie
Wave Energy Ltd., said by phone yesterday. "This should send a
very clear message to both sides of the political spectrum that
the Australian people want action on climate change."
The Greens garnered a record number of votes in the general
election Aug. 21 after Australia's ruling Labor Party delayed
plans to start an emissions trading system until after 2012.
Prime Minister Julia Gillard and opposition leader Tony Abbott
are both fighting to form the next government because neither of
their parties won a clear majority.
The rush in popular support for the Greens may prompt
whoever forms government to spend more on developing renewable
energy projects and to disburse the money faster, according to
executives in the industry. Almost none of the A$5 billion ($4.4
billion) to A$6 billion promised by the government over the past
five years has reached companies so far, Ottaviano said.
"It has to be good for us, whichever way you look at the
election," said Terry Kallis, managing director of geothermal
company Petratherm Ltd. in Adelaide. "The Greens may have a lot
of opportunity to influence legislation."
Carbon Trading
A cap-and-trade system is a possibility if Gillard remains
prime minister, even though the Labor Party has postponed the
proposal, Kallis said. A carbon-trading regime is less likely
with Abbott, who leads the more conservative Liberal Party.
Funding to connect renewable energy sources to the national grid
is also critical for the industry, Kallis said.
Gillard has said Labor would set up a citizens' group of
150 "ordinary Australians" to help decide on a policy to curb
emissions and promises to spend A$1 billion for renewable energy
transmission. Abbott has opposed a carbon price, saying it would
hurt the economy, and advocated a A$2.5 billion program to pay
businesses to cut pollution and fund clean-energy development.
Both parties target a 5 percent cut in emissions by 2020.
The Greens have said they want a carbon price of A$23 a ton
in Australia, where 80 percent of power generated comes from
coal-fired plants, and a 40 percent cut in emissions by 2020.
The Labor government has pledged to spend A$5.1 billion on
clean energy, including A$1.5 billion for solar technology.
While the government may increase that funding, it's unlikely an
emissions-trading system would be put into place in the next
three years, Ottaviano said.
Dead Heat
The Labor Party had 71 seats and Abbott's Liberal-National
coalition had 72 in the 150-member House of Representatives,
according to the Australian Electoral Commission's website at
12:22 p.m. Canberra time. Four seats were undecided, with two
independents and one Greens member elected.
"If Labor, with a majority government and the mandate they
had at the last election, couldn't prosecute the case for a
carbon price, I can't see how a minority government is going to
be able to do that successfully," Ottaviano said.
The Greens party won its first lower house seat in a
general election, with lawyer Adam Bandt taking Melbourne from
Labor. The party will also hold the balance of power in the
upper house, Greens leader Bob Brown said late on election night.
The Greens gained 11.4 percent of the national vote, the
Australian Electoral Commission's website showed. That compared
with 7.8 percent in 2007, the Australian Broadcasting Corp. said.
Shares Slump
Shares of Australian clean energy companies slumped 31
percent in the year that ended July 30 as investors avoided the
industry, unsure of government policy on carbon emissions,
according to the ACT Australian Cleantech Index of 78 stocks.
The benchmark S&P/ASX 200 rose 6 percent over the year.
The election result is "a potential positive because the
Greens have a strong commitment to introducing a carbon price
and driving the development and deployment of renewable
technologies," Matthew Warren, chief executive officer of
Australia's Clean Energy Council, said in a phone interview
yesterday. "But it's qualified by the fact there are
independents elected with different interests. So it's really
uncertain."
For Related News and Information:
Top stories: TOP AU <GO>
Top energy stories: ETOP <GO>
--Editors: Alex Devine, John Viljoen.
To contact the reporter on this story:
James Paton in Sydney +61-2-9777-8698 or jpaton4@bloomberg.net.
To contact the editor responsible for this story:
Amit Prakash at +65-6212-1167 or aprakash1@bloomberg.net.
