EcoGeneration speaks to Kate Carnell, outgoing CEO of the Australian Chamber of Commerce and Industry (ACCI), about her support for the renewables industry and the government’s vital role in financing it.
Former ACT chief minister Kate Carnell has held many high-profile roles. Most recently, she was Chief Executive of the ACCI, where she became a powerful supporter of the renewables industry, and played a key role in resolving the deadlock over the Renewable Energy Target (RET).
This week it was announced that she has relinquished that role to become Australia’s first small business and family enterprise ombudsman. In this capacity, she will continue to advocate on behalf of businesses and ensure they have a voice in government, but with a slightly different focus. She will also continue to serve as a member of the Climate Change Authority.
Before she left the ACCI, Ms Carnell conducted a wide-ranging interview with EcoGeneration, to discuss the benefits of renewables, the advent of battery storage technology and Australia’s climate policy. Below are some of her thoughts.
ON THE GENERAL BUSINESS MINDSET AROUND RENEWABLES
The Australian Chamber is a peak body representing over 400,000 broad-based businesses in various sectors. Some of our members are very positive about the growth of renewable energy in Australia, but the majority of them are concerned about energy prices. Energy prices are incredibly important to businesses, just like any cost.
The general message we get is that they’re positive about renewable energy, but it’s really important that any policy around renewable energy doesn’t adversely affect the cost of power or energy in Australia.
ON THE BENEFITS OF RENEWABLES
There is a good business case for renewables. We see lots of businesses make their premises more energy efficient, use solar and utilise co-generation facilities. Where the business case works, it’s a really good thing to do. It can have both a brand and an economic benefit. But if renewables don’t work economically, it’s very hard for businesses to embrace them.
ON HOW BATTERY STORAGE WILL CHANGE THE CONVERSATION
Battery storage will absolutely change the game. The dilemma with renewable energy is that it doesn’t manage baseload power, and so you have to have other power as well. We know it costs a lot to put renewables in, even though they are not very expensive to run. And therein is the problem, which is why often renewable energy doesn’t work economically as well as it might, unless there are government subsidies. Efficient battery technology will fundamentally change that.
ON WHY THE AUSTRALIAN CHAMBER NO LONGER OPPOSES THE CEFC
The fact is, the CEFC is making a profit. We’re a business-based organisation and we like organisations that have a good business model. There was an existing perception that the CEFC was giving out money to companies that did not have good business cases and that if an organisation had a good business case, the bank would be lending money to them.
However, the CEFC said banks don’t regularly finance renewable energy projects because they have a different business case to more traditional companies: renewables are expensive to build, but not expensive to run once they are built. The CEFC works with companies to develop a business case that do meet banks’ needs, then both the CEFC and the bank fund them, but it’s still important that these companies have a good business case.
We now have a better understanding about the way the CEFC operates and what they do. They operate very efficiently and they use taxpayers’ money well.
ON ENERGY EFFICIENCY AND ENERGY PRODUCTIVITY
Some of the challenges are still around energy efficiency or energy productivity – how do we make it easier for small to medium-sized enterprises (SMEs) in Australia to become more energy efficient?
There are impediments.
For instance, say a business is renting premises, which most businesses do. They are keen to reduce their costs of power and they’re interested in reducing costs generally. What would help is if the building they were in upgraded their air-conditioning and lighting systems to more energy efficient systems. A problem then emerges because that decision is with the landlord, not with the tenant, and there are no particular benefits for the building owner because they don’t pay the bills. There are interesting challenges on how we improve the incentives for building owners to better retrofit buildings to be more energy efficient.
There are some good programs and projects in place for new buildings, but there’s some distance to go before we get the incentives right for retrofitting old buildings.
Similarly, SMEs need to better understand what they can do to minimise their power usage – for instance, when does solar become cost effective?
ON MALCOLM TURNBULL
What Malcolm Turnbull has done as Prime Minister is change the mood. From our business surveys, we know people are much more confident. He’s increased confidence levels and he’s talking up the economy, talking about innovation, talking about getting our business environment more future-focused and so on. What has changed is mood more than anything else, but that matters a lot in business. We also know that he’s positive about renewable energy.
ON AUSTRALIA’S FIRST MINISTER FOR CITIES AND THE BUILT ENVIRONMENT
The research is in on this – cities deliver more to our GDP than our whole agricultural sector. They are fundamental to our economy. If we are to increase our productivity, we have to increase the productivity of our cities. It’s about adopting a new approach to where people live and work and capitalising on the whole concept of the ’20 minute city’ where you can live, work, shop, go to school within a 20-minute commute to where you are.
Having a minister will pull together the different levels of government with some real targets and goals on what we need to do to make our cities more productive, liveable and less congested.
ON BEING A CLIMATE CHANGE AUTHORITY APPOINTEE
The Authority has appointed people with huge amounts of expertise in various parts of the climate change arena. What I bring to the table is a good knowledge of business, what business needs and what sort of policy will encourage business take-up of renewables. What policies will help businesses reduce their carbon footprint, while maintaining the impetus for growth and employment? Could we have policies that stimulate renewable energy but are not a significant problem for business profitability? Getting that balance right is really important.
ON THE ACT BEING A PIONEER IN RENEWABLES
The ACT has always been environmentally conscious. Back when I was Chief Minister in the early days, we had a no-waste policy that progressed before a lot of other places did it. The ACT can enact these policies because it has a well-educated middle class population who applaud efforts the government makes to improve environmental outcomes. It also doesn’t have manufacturing plants, coal-fired power stations, aluminium smelters or any large, heavy industry.
The ACT economy is different from, say, South Australia, or places that are heavily reliant on manufacturing and where energy prices are incredibly expensive already. Little upward movements in price in states with heavy power usage can make a big difference.
That said, I think the ACT example shows that you can foster renewables and not dramatically impact power prices. And generally, the community will feel positively about your efforts, even if there is a little upward movement on the price of power.
ON AUSTRALIA’S CLIMATE POLICY
Our view is that there’s no silver bullet here. It’s not about ‘this is better than that’, but about a range of different approaches and policies that aim to reduce our carbon footprint as a nation. Every country has different challenges. You could talk about a European country, like France, that relies on nuclear. Yes, their carbon footprint is low because they don’t use that much coal, but they use nuclear. We haven’t made a call to go down that path in Australia.
All countries understand that what they have to do to keep their economy moving is to keep the cost of power as low as it can be to make sure businesses are competitive. The challenge for Australia is that coal is, by far, the cheapest form of energy because we’ve got a lot of it. We have high-quality coal, even though we burn brown coal as well.
ON HOW BEST TO ACHIEVE ZERO CARBON EMISSIONS
The ACCI’s view is that a carbon trading scheme of some description is the way to go in the end. But you need to have our major trading partners be a part of it – otherwise our businesses will be less competitive and that wouldn’t be a good outcome.
Since I’ve been sitting on the Authority, I’ve spent more time delving into the detail of a lot of these agreements. Countries will say they have carbon trading schemes. Well, there are carbon trading schemes and carbon trading schemes. It’s not one size fits all. Some of them have so many caveats. It’s a lot more complicated than it initially looks. Getting a level of global agreement on what the parameters and targets are will be essential. The way reductions are being measured has to be consistent.
This is an edited version of an interview that appeared in the February 2016 issue of EcoGeneration magazine. Subscribe here now.