Climate change will be one of the most pressing issues of the forthcoming federal election, no more so than in the Melbourne electorate of Kooyong, where former Clean Energy Finance Corporation (CEFC) CEO Oliver Yates is running as an independent challenger to Treasurer Josh Freydenberg.
Yates is running strongly on his credentials on climate change action, which encompasses his tenure at the CEFC, from foundation in 2013 until 2016. Yates came to the $10 billion CEFC from Macquarie Bank and has had a long career in investment with a particular focus on clean energy. In the three years of operation, the CEFC’s investment commitments reached $2.3 billion, contributing to projects with a total value of $5.7 billion.
The election will prove a challenge for Yates. Frydenberg’s primary vote in the 2016 election was 58.2%. However, there were large swings to the Labor party in parts of the electorate during the 2018 Victorian state elections, so the Liberal party’s hold on the electorate may not be as secure as three years ago.
“Turning over a Liberal seat is achievable and it will send a message that it’s loud enough, that, if it is heard by the Liberal party, if they do come back to government after the election, they will have to shift core energy policies, which would be an incredible outcome,” Yates said. “If Labor wins, the new government could revert back to some of the policies and processes were in place b4 the 2013 election. We could start with the 2014 Climate Change Authority report, which set out sensible frameworks.”
Yates pointed to the decarbonisation of the electricity sector as one of the most efficient means of decarbonising Australia’s economy and proposes a strong role for Australian governmental funding to achieve that goal.
“Because the electricity sectors is pervasive across the economy, we will start to decarbonise other parts of the economy rapidly if we start there,” he said. “Continued, very rapid rollout of renewable technology will be critical, and to enable to that, we must fundamentally start the investment in transmission and storage right now. We will have to procure the transmission and storage assets we need to decarbonise the electricity sector in a timely manner.”
Australia has a “unique set of circumstances” in wind and solar, Yates said.
“We have a unique advantage, and may rapidly end up leading as Australia has done in other areas, such as banning cigarette advertising,” he noted.
Yates advocates government contract for the delivery of services “with the view that it could sell those assets down, or set up another government entity that operates those assets,” he said.
“There is nothing wrong in the government participating in the electricity sector,” he said.
Yates has fitting qualifications in investing government money in renewable projects ,as well as building cross-party political support. During Yates’ time at the CEFC, it operated on a political knife edge. When the Coalition government led by then-Prime Minister Tony Abbot was elected in 2013, the CEFC Act was targeted for repeal as part of the unwinding of the previous Labor government’s Clean Energy Future legislative package. The legislation to repeal the CEFC was split into a separate bill in the Senate, which was then defeated. In 2016, the government led by then-Prime Minister Malcolm Turnbull confirmed that they would retain the CEFC and the Australian Renewable Energy Agency, and that CEFC and ARENA would jointly manage the AU$1 billion Clean Energy Innovation Fund (CEIF). However, funding for the CEIF came from the CEFC’s existing $10 billion allocation, as opposed to a fresh infusion of funding from the government.
Yates notes that he had to foster relationships across party lines as CEO of the CEFC in order preserve the existence of the corporation, skills that he would bring to Parliament as a member.
“I was close to the independents in the Senate because that’s how the CEFC survived,” he noted. “I had good relationships with most side of politics when I was at the CEFC. Not everyone shares the same views and that’s what great about being independent.”
Yates notes that the continued economies of scale around renewable energy technology is decreasing faster than anticipated, which is the single biggest change in the renewable energy landscape since his 2016 departure from the CEFC.
“Who would have forecast how quickly how the continued drop is continuing,” he said. “It isn’t slowing down, and the technology is becoming efficient each year. That’s a surprise. I assumed that wind technology would reach a peak level of performance as well, and it’s continued to increase its performance. You will continue to see significant savings and the cost structure within the industry is continuing to improve, and its’ continued to surprise me every year now.”