Eco Investor October 2015

Editorial

Will PM Turnbull be Good for Cleantech Confidence?

By Victor Bivell

Not just environmental investors but most of Australia breathed a huge sigh of relief when prime minister Tony Abbott departed the job, but will prime minister Malcolm Turnbull be better for the environment, for environmental investors and for environmental innovators? Can Turnbull give back to cleantech the mojo it had under John Howard and Kevin Rudd? These questions are being asked by many because we are still uncertain.

But there are some promising signs.

In his first speech as prime minister, Turnbull spoke of the need for Australia to be innovative and support innovation. Given his great success as an entrepreneur and businessman, there is no doubt that Turnbull understands technology and innovation and the important role of risk capital for their commercialization.

But under Industry minister Ian Macfarlane (whose removal was another cause for celebration), cleantech was relegated to non-existence with rumours that not even the name ‘cleantech' was to be used. Most things related to clean energy and the environment were third class and well behind the ‘darling' industries of oil and gas and healthcare. Under Abbott and Macfarlane, industry policy was about picking winners and losers and it seemed that it was their mates, not opportunity or the market, doing the picking.

It would be good if Turnbull gave a sign that cleantech will be reinstated to its rightful place as a growth sector alongside infotech, biotech, fintech, agritech and other techs. So Eco Investor asked the Prime Minister's office if cleantech will now be treated equally? Through is office, the busy prime minister replied "We are a supporter of innovation in all things. There is an innovation frontier and we support people who are part of that frontier."

It is encouraging that Mr Turnbull replied, and since he took office we have seen other changes of rhetoric that could auger well.

On the ABC's Lateline program, Environment minister Greg Hunt denied that the Abbott Government was against renewable energy, though no one believes him. But he did say that Turnbull "has a deep, strong passion for renewables" and that both he and Turnbull "share that passion".

Hunt also addressed investor confidence, saying that Turnbull's and his own passion for renewables "will give additional confidence to the sector". In fact he used the phrase twice, also saying that the sector should have "additional confidence, added confidence about the government's rock-solid commitment to the Renewable Energy Target". This is the same target that was recently reduced by the Abbott Government.

There is hope that the Abbott Government's rush to slash the Australian Renewable Energy Agency (ARENA) and to close the Clean Energy Finance Corporation (CEFC) has at least slowed, and that these key organizations might have been given a more sympathetic home in the Environment portfolio under Hunt.

Hunt did posit an ongoing role for ARENA and CEFC, saying "I do want to work constructively with them" and that they would be integrated with the work of the Emissions Reduction Fund to reduce Australia's greenhouse gas emissions. So in coming months many eyes will be peeled to see how this unfolds and how big a role ARENA and CEFC play in reducing emissions as well as ARENA's part in commercializing innovations and CEFC's part in financing new projects.

However, when asked about the future standing of wind energy and whether the ban on CEFC investing in wind energy would be lifted, Hunt was less committal. He reiterated several times that CEFC was for "emerging technologies", suggesting that no change was imminent. But a few days later on ABC Radio he was more positive, saying that emerging wind technologies such as new turbines or offshore wind farms may be eligible.

This reticence is despite the new RET target having failed to inspire investor confidence in new wind projects. Meridian Energy said the political risk presented by the Abbott Government's attitude to wind farms meant it was unlikely to build a new wind farm here in the near future.

Turnbull and Hunt have a big job to turn around that attitude and so far they do not seem to be taking the short cut by simply saying "the Government supports new wind farms".

Also encouraging is the rhetoric from the new Energy minister, Josh Frydenberg who said he "absolutely" shares Malcolm Turnbull's passion for renewable energy. He also said "Renewable energy is an important part of the domestic energy mix". But given the history of the Abbot Government, do people believe him? He was at least honest enough to qualify his support by saying that as Resources minister he also supports fossil fuels.

Meanwhile, how low cleantech sank during the Abbott government can be seen in the inclusion of only one grant to a cleantech company in the latest August/ September grants under the Entrepreneurs' Program.

The environmental recipient was Eco Pacific Pty Ltd, which received $282,500 towards the commercialization of an efficient heat recovery compact fresh air ventilator. There were no grants to cleantechs in June/ July and only two in April/ May.

This dearth is a huge contrast to the comparable earlier government programs - Commercialisation Australia and COMET where cleantech innovation thrived.

So far the new Industry, Innovation and Science minister, Christopher Pyne, has said that the Turnbull Government wants to encourage ideas for greater innovation and entrepreneurship, but they need to be good ideas. He then digressed into some very cheap politicking against the Labor Party before ending with the slightly encouraging "there is much more to be done and we will have more to say in the months ahead." Let's hope that includes cleantech.

The key is Turnbull. While it is likely that the conservatives and fossil fuel supporters in the Coalition need to be placated, the investment and innovation public along with the rest of Australia is watching to see how much placating he gives them. We all want to see whether PM Turnbull is chained and governs to appease the climate deniers, Coalition mates and unpopular conservatives, or whether he is free to govern like a moderate Liberal and with his own dash of the successful technology entrepreneur and venture capitalist.

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