Verona Burgess: powerful friends matter in Australia's energy bureaucracy

By Verona Burgess

March 22, 2017

The electrician examines the equipment of electric substation

The Australian Renewable Energy Agency, known as ARENA, was on the verge of extinction under Tony Abbott’s first budget not quite two years after it had come into being in July 2012 under Julia Gillard’s government.

Along with the Clean Energy Finance Corporation (CEFC), ARENA survived a near-death experience when the Senate refused to play ball with Abbott and knocked back the legislation to repeal them.

Having languished with no new funding (but able to carry some forward) for a couple of years, their fortunes revived when Malcolm Turnbull reversed the policy and re-funded both agencies last year as well as creating the Clean Energy Innovation Fund, for which ARENA assesses project proposals and CEFC makes the funding decisions.

Now ARENA will conduct the feasibility study for the $2 billion-plus expansion of the iconic Snowy Hydro, as ‘Mal from Snowy River’ gallops to the rescue of the Australian domestic energy woes.

A week after the announcement, it seems Turnbull has executed a John Howard-style political wedge that caught his own ‘deplorables’ on the hop and left Labor and the Greens with little wriggle room.

The right body, at the right time

It may not save his job and, as many have said, even if the upgrade of the Snowy scheme eventually happens it will not solve Australia’s short-term base-load power woes. And what about a drought of biblical proportions? Details, details.

What it has done is change the political landscape on energy at the very least, even though the public is rightly cynical about policy announcements that are like Snapchat — here one minute, apparently gone the next but bound to be lurking somewhere.

ARENA is a ‘micro-agency’ in the Environment and Energy portfolio.

It was no random choice for the feasibility study even though some commentators wondered why the Department of Infrastructure, under the very capable Mike Mrdak, or Infrastructure Australia hadn’t been tapped to do it.

The agency will, by 2022, have distributed some $2.5 billion in financial assistance for renewable energy projects.

It is a statutory authority with a skills-based board but only two staff appointed under its legislation — the Chief Executive Officer, Ivor Frischknecht, who has been there all along, and the Chief Financial Officer, Ian Kay, since June 2013.

Another 40.7 full time equivalent staff are borrowed from the portfolio department while a further 36 are hired as consultants who, under the Act, may provide technical and specialist advisory services but not operational or administrative duties.

Originally consolidating projects from nine federal programs, ARENA has helped bridge the gap between innovation and commercial finance for the development of nearly 250 new renewable energy technologies, unlocking $1.2 billion in funding from other sources. Sixty projects have already been completed.

Under its act, the minister may also ask ARENA to consider providing funding for specified projects and it must consider the request.

This might well allow the government to fund the Snowy feasibility study ‘from within existing resources’ in the May budget.

A well-connected agency

Despite its size and low profile, ARENA is no stranger to the highest echelons of government.

As required under the Act, the secretary of the department, Gordon de Brouwer, sits on the board ex officio, as is frequently the case with such federal bodies.  Indeed, for two months last year he was the only board member.

The agency was originally established in the Resources, Energy and Tourism portfolio, whose department secretary, and the first to sit on ARENA’s board, was none other than Drew Clarke. Clarke is now, of course, Turnbull’s chief of staff — go figure.

Clarke was replaced as secretary and therefore as ARENA board member in March 2013 by Blair Comley, who became Resources secretary when Gillard, under immense political pressure, abolished the Department of Climate Change (Clarke moved to Communications, replacing Peter Harris who became chairman of the Productivity Commission).

Comley was subsequently one of the secretaries brutally removed by Abbott after the 2013 election for no crime other than having run Climate Change, where he had originally succeeded Martin Parkinson — who now runs Prime Minister and Cabinet but whom Abbott also ousted, as Treasury secretary.

In a delicious irony, Comley now heads the NSW Department of Premier and Cabinet and might easily be invited to return to the Commonwealth down the track.

Meanwhile, Industry secretary Glenys Beauchamp replaced Comley on the ARENA board — Abbott abolished the Department of Resources, Energy and Tourism after the 2013 election and folded the resources and energy functions into Industry.

Turnbull revived ARENA’s fortunes last year and also moved it, as part of the energy functions that include the Snowy Hydro legislation, from Industry to what became the Environment and Energy portfolio.

Hence, de Brouwer became the fourth department secretary to sit on the board — keeping ARENA plugged right into the federal power grid that matters.

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Nicholas Gruen
5 years ago

Thanks for the article which is informative – at least when it wasn’t heading off into political punditry.

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