Weeks after the government said it would not declare war on an industry in order to cut emissions, Resources Minister Keith Pitt has … declared war on an industry.
In an extraordinary intervention, Pitt used his veto powers to reject a decision by the Northern Australia Infrastructure Facility to provide $280 million in government funding to a wind and battery hub in northern Queensland.
In a leaked letter obtained by The Courier-Mail, Pitt said the project would be “inconsistent” with the government’s objectives and policies but did not elaborate.
“I am not convinced that the project will result in lower energy prices,” he said.
Lack of transparency
Pitt has refused to explain on what grounds he believed the project would not lower energy prices, or why he believed it would not provide “dispatchable” generation into the national electricity market.
He tells Crikey that a statement of reasons for the decision would be tabled in Parliament in accordance with legislative requirements.
“The company is free to put its case to other suppliers of finance, including the Queensland government,” he said.
The government’s troubled $5 billion NAIF scheme was found by the auditor-general in 2019 to lack transparency and to treat projects inconsistently through the decision-making process.
Pitt’s decision is just another blow to its independence.
Under the act that governs the scheme, a minister is allowed to use his extraordinary veto powers to intervene in funding decisions but must provide reasons for doing so to Parliament within 20 sitting days.
Labor says it’s the first time a minister has used the powers, and that it was more proof of the government’s “ideological war on renewables”.
“The Morrison government’s claims to be ‘technology neutral’ have been blown away by Keith Pitt’s unbelievable decision,” Labor’s climate change spokesman Chris Bowen said.
War on renewables
Ahead of the US-hosted climate talks last month, Energy Minister Angus Taylor insisted Australia would not “declare war on an industry” in order to reach more ambitious goals.
“Technology is the key,” he said. “It’s always been the key of humans solving hard problems and it will be the case.
“The goal here is not to declare war on an industry.”
Louis de Sambucy, managing director at Neoen Australia, which owns the project, says the company was disappointed to learn of the government’s decision not to proceed with a loan.
“Neoen remains committed to Kaban and the opportunities it presents for energy affordability, reliability and emissions reductions in Queensland,” he said.
“We are now actively exploring all options and are hopeful of announcing a positive pathway forward in upcoming days.”
The project has the support of the Queensland government-owned CleanCo to provide energy in support of Queensland’s target of 50% renewable electricity by 2030.