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Government funding program for power generation risks investment confidence

Federal Government funding for the extension of a coal-fired power plant in New South Wales would spook private investors in new clean energy generation, the Clean Energy Council said following the announcement of the shortlist of projects under the Morrison Government’s Underwriting New Generation Investments (UNGI) program today.

Clean Energy Council Chief Executive Kane Thornton said the idea of potentially underwriting one of Australia’s oldest, dirtiest and inflexible power plants was clearly at odds with the objective to support more flexible generation and the transition to a clean and smart energy system,” Mr Thornton said.

“Government funding for extending the life of existing coal is at odds with the original recommendation of the Australian Competition and Consumer Commission (ACCC) and simply serves to spook private investors who have backed renewable energy and storage technology to the tune of more than $20 billion over the last year alone.

“If we want to bring prices down for consumers, we need to create the conditions to encourage new private investment, not discourage them. Extending the life of an existing coal-fired generator would only makes it more difficult to mount the business case for new investment in clean energy.

"The UNGI program is rushed and lacking in transparency, and has the potential to corrode this fragile investment confidence.

“Pumped hydro is one of the lowest cost and most flexible forms of new clean generation which can underpin renewable energy. The shortlisting of half a dozen pumped hydro projects is welcome and appropriate in this context.

“A further feasibility study into new coal generation in Queensland is baffling, and an objective feasibility process should again confirm that a new coal plant in the state doesn’t make economic sense.

“We encourage the Federal Government to focus on long-term market-based energy policy to provide investment confidence and a shift from the current trend of picking winners and distorting the energy market,” he said.