Greens – Loan guarantees to help drive shift to 100% renewable energy

Loan guarantees to help drive shift to 100% renewable energy

Media Release | Spokesperson Christine Milne
Sunday 8th August 2010, 2:14pm
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in Climate Change & the Zero Carbon World Feed-in Laws Renewable Energy
The Australian Greens today announced a policy for $5 billion worth of loan guarantees for large-scale renewable energy developments, working with an enhanced renewable energy target, a grant scheme and a feed-in tariff to drive Australia’s transformation into a 100% renewable energy powerhouse as swiftly as possible.

“Australia can harness our tremendous resources of the sun, wind, ocean, earth and human ingenuity to replace our reliance on coal with 100% renewable energy within decades,” Australian Greens Deputy Leader, Senator Christine Milne, said.

“But if we are to make that a reality, we need a well-designed suite of policies to get us there – a strategic plan, an ambitious renewable energy target complemented by a feed-in tariff, a grant program and a loan guarantees scheme.

“Particularly in the context of the global financial crisis, loan guarantees are essential to help renewable energy developers access the finance they need to build baseload power stations.”

The Greens’ loan guarantee scheme would:
• adopt the successful US Department of Energy model of providing 100% guarantee;
• be open to emerging renewable energy technologies including baseload solar thermal with storage, geothermal, and ocean energy; and
• be available for projects larger than 100MW at a single site.

The loan guarantees would be open for two years and be managed jointly by the Departments of Treasury and Finance; Resources, Tourism and Energy, and Climate Change and Energy Efficiency.

The guarantees would work in conjunction with a gross national feed-in tariff, giving certainty to investors in all forms of renewable energy, and an increased renewable energy target, as well as the development of a strategic plan for the transition to 100% renewable energy under the auspices of Infrastructure Australia.

“A great advantage of loan guarantees is that, while they involve the government taking on financial risk, they leverage private sector investment and allow banks to develop the confidence to lend to large-scale renewable energy projects in the future, without government support.

“Loan guarantees stimulate job creation and investment and have been a successful element of the Obama administration’s stimulus package.

“After the delays and mismanagement of the Solar Flagships program, this scheme is essential to get industrial scale renewable energy power stations off the ground as soon as possible.

“Once it has been demonstrated that renewables can replace coal, the Greens believe the transformation can happen faster than most of us can imagine.

The Loan guarantee scheme would be complemented by a stronger grants program, adding the $1 billion the Government recently promised to the “Connecting Renewable” initiative to the remainder of the Solar Flagships funding.