Energy double standard: Australia subsidizes coal, but not solar

Energy and Resources Minister Martin Ferguson today announced the extension of the Government’s $100 million grant for the proposed new coal power station HRL in the Latrobe Valley, despite a petition signed by 12,667 people urging the Government to withdraw the $100 million and spend it on renewable energy instead.

The grant was first awarded by a Liberal government in 2007 and continued by Labor. Five years later, HRL has failed to meet conditions for the grant, failed to get environmental approval for a commercial-scale project, failed to secure private finance, and missed a string of deadlines (most recently 31 December 2011). Today the Government decided to extend the deadline by yet another six months (apparently to 30 June 2012).

The Government claims the HRL power station is “clean” because it lowers the emissions of brown coal, but that still makes it as polluting as black coal. If the Government is serious about climate change, the least it should do is stop supporting new coal power plants (indeed if they were really serious, they would ban new coal plants, start closing existing ones, and start phasing out coal exports).

The Government does not seem to have the courage to say no to HRL. However, it decided earlier this week to withdraw a $307 million grant for a solar farm in Moree. Today, Ferguson also announced $100 million for carbon capture and storage.

This is illustrative of a broader double standard in energy policy: subsidies are considered okay for fossil fuels but not renewables. When renewables are subsidized, everyone makes a big song-and-dance about “market distortions” and suchlike; yet when fossil fuels are subsidized, everyone pretends it isn’t happening.

Ferguson today said in the very same statement “the Government is absolutely committed to a technology-neutral approach”, and “I hope today’s announcement takes us one step further [to] shoring up the value of Victoria’s brown coal resource”. Somehow I don’t think Ferguson would see “shoring up the value” of renewable energy resources as technology-neutral.

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