Bowen blasts decision after Government backtracks on wind farm funding

The government-operated Northern Australian Infrastructure Facility (NAIF) in December approved up to $280m funding for the 157 MW wind farm and 100 MW battery project to be built near Cairns but it was reported on Thursday that Keith Pitt, the Minister for Resources, Water and Northern Australia, had blocked the loan.

Pitt used powers granted to him under the NAIF legislation, set up in 2016 by then-Northern Australia minister Josh Frydenberg.

At the time Frydenberg told parliament the ministerial powers would only be used “to ensure projects which are contrary to the national interest are not funded”.

Pitt reportedly told the head of the NAIF in March he was not convinced the Kaban green energy hub would provide “dispatchable” generation into the national electricity market and he was “not convinced” it would lower power prices.

The veto decision was attacked by Labor’s climate spokesman Chris Bowen, who accused the government of killing off the project because it was against their “non-existent energy policy”.

“North Queensland should be getting 250 new energy jobs and cheaper power bills, but they’ve been hung out to dry,” Bowen said.

“Queensland has the resources and the workers to continue to power the country and the world, but a government that is leaving them behind.”

Letter reveals reasoning

In a letter obtained by Newscorp, Pitt said the government’s technology investment roadmap policy had identified that the widespread deployment of mature technologies including wind and solar energy would be mainly driven by the private sector unless there was a clear market failure.

He told the head of the NAIF the government’s policy was to support dispatchable generation, which refers to electricity capacity that can be called on when required to support variable solar and wind energy.

“I am satisfied that providing NAIF support for the project would be inconsistent with the objectives and policies of the Commonwealth government. Because of this, I am giving a rejection notice,” he wrote.

Labor’s spokesman on northern Australian, Murray Watt, said the letter showed the government had an “ideological obsession” against renewable energy that was costing jobs and lower power prices.

Neoen Australia, the company behind the project said the blocked funding would have helped build a 157 MW wind farm and 100 MW battery. The project also includes a 320km transmission line upgrade.

Neoen estimated the development could reduce electricity prices for Queensland consumers by $461m over the 30-year lifecycle of the project

Newscorp reported on Thursday that Neoen was disappointed by the government’s decision, but remained committed to the project.

The company has signed a power purchase agreement with the Queensland government-owned agency CleanCo under which it would provide energy to contribute to reaching the state target of 50% renewable energy by 2030.