Eco Innovator November 2011


Get in Quick and Big for Clean Energy Funding

The passage through the lower house of the Federal Government's Clean Energy legislation and price on carbon emissions, and the legislation's expected passage this month through the Senate, is the best news clean energy entrepreneurs have received for some time.

It comes with progress on the establishment of the $10 billion Clean Energy Finance Corporation (CEFC), with the Government appointing an expert panel to advise on the design of the Corporation, and the introduction of legislation to create the $3.2 billion Australian Renewable Energy Agency (ARENA).

CEFC and ARENA will provide massive stimulus to clean energy innovation and commercialization on a scale not seen before in Australia. In Australia's desert of commercialization funding, a few oases will suddenly appear. If done well and all goes well, clean energy innovators will see their chances of securing funding increase dramatically. They may also get to operate within policy settings that are conducive to commercialization.

But the key phrase here is "if all goes well". Unfortunately the Federal Opposition under Tony Abbott continues its ferocious opposition to the Government's temporary "carbon tax" with an overly dramatic pledge "in blood" that it will repeal it at the first opportunity.

If that wasn't enough to spoil the party, the Coalition also said it would abolish the Clean Energy Finance Corporation. And just to grind its heel into entrepreneurs, innovators and everyone else involved in clean energy, it added that where possible it would reverse any funding commitments made by the CEFC.

Boy! They want to take away the lot, the whole $10 billion or as much of it as possible. That's a big stick. And they said it without offering a single carrot in return. Nothing to make up for the loss or to help emerging clean energy products into the market.

It is the same ruthless threat made to the carbon credits market when the Clean Energy legislation passed the lower house. Mr Abbott said emitters should not buy future carbon credits as a Coalition government would reverse the legislation and where possible do so without compensation.

These threats are intended to scare good people into doing nothing so that the price on carbon and the funding by the CEFC do not happen or get off to a slow start and so are easier to unwind.

For normal people it is hard to fathom such ruthlessness, such rabid support for fossil fuel polluters, such brusque lack of support for clean energy producers and clean energy innovators.

What should innovators do? Should they give in to the threats, reject them outright and defiantly, or something in between?

The bottom line is that capital hungry entrepreneurs either find capital or die an entrepreneurial death. With $10 billion, the CEFC is for unlisted companies the only big oasis in the desert. So the choice is clear. It is better for Tony Abbott to die a political death than for innovators to die an entrepreneurial death.

Rather than give in to the Coalition's threats, the best response for innovators is to get in early and apply for and get as much support from the Clean Energy Finance Corporation as they need or can.

Hopefully Mr Abbott will not get a chance to close the well. But even if he does, getting in early will make it that much harder for him to do it.

And hopefully, in the meantime, innovators and entrepreneurs will have had enough of a drink to get them to the next water hole. For unlisted companies especially, such is the desert of commercialization in modern Australia.






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