The forthcoming budget of the Australian Renewable Energy Agency (ARENA), the government unit responsible for promoting the development of clean energy, has been cut by A$500 million ($374 million; €333 million).
After the decision was voted in the Australian Parliament yesterday, the government agency will have a budget of A$800 million available for grant funding over the next five years.
The federal government had originally proposed to abolish ARENA entirely, which it argues would have allowed it to save A$1.3 billion. The move was part of a wider package of measures aimed at unlocking about A$6 billion of savings. The two mainstream parties yesterday reached a compromise deal on the A$500 million budget cut, as part of a wider bargain on government finances.
Clean Energy Council chief executive Kane Thornton said the decision would impact the development of renewables in Australia, slowing project development and hampering technological innovation.
“This decision will rattle the confidence of investors in the Australian renewable energy industry who have been seeking stability after several years of uncertainty and change,” Thornton added.
Established by the Labor government in 2012, ARENA aims to improve the competitiveness of renewables technologies and support projects in their early stage. Last week, ARENA awarded grants to 12 planned clean energy facilities as part of an auction process that saw project costs fall about 40 percent since when it was started.