The Commonwealth-funded Clean Energy Finance Corporation has invested millions of dollars in wind and solar farms around Australia.
It has also invested in low emissions street lights, and new technology aimed at extracting energy from agricultural waste.
The Act that governs the fund only bans it from putting money behind two technologies: one is nuclear power, and the other is carbon capture and storage.
Now, the government says it may try to lift the ban on the latter.
Prime Minister Malcolm Turnbull says carbon capture and storage is worth exploring.
“Clean coal – by which I mean carbon capture and storage, which is where you take the carbon emissions from a coal-fired or gas-fired power station and put them under the ground, as is being done at Gorgon, here in Western Australia, so this is a proven technology – that is obviously a way to deliver clean energy.”
Carbon capture and storage is a controversial technology whereby carbon dioxide emissions from coal-fired power plants are captured and pumped deep underground.
Advocates of the technology say it can dramatically reduce the CO2 emissions of dirty generators, while critics say the gas can sometimes leak back out of the ground.
The government may also instruct the fund to consider investing in advanced coal-fired power stations that would produce less CO2 than traditional brown coal plants.
But opposition energy spokesman Mark Butler says any investment in coal would cut against the purpose of the corporation, which was set up under the Gillard Labor government to boost investment in renewables.
“This would be an outrageous act of vandalism against the successful financing mechanism for renewable energy, for energy efficiency projects and for genuine low-carbon technology. It’s no real surprise I guess because the Liberal party has never really supported the Clean Energy Finance Corporation. It tried to abolish it for three years. And now seems committed to making it a finance mechanism for the coal industry, which is unable to attract finance from the private sector.”
The private sector has shown little interest in building the expensive ultra super critical power stations the government is championing.
Last week the chief executive of one of the country’s major electricity generators, CS Energy, said he doubted there would ever be any more coal-fired power stations of any kind built in the country because they are so expensive and require long-term investment.
Finance Minister Matthias Cormann was asked on the ABC if that made subsidising coal-fired power plants a risky bet for the taxpayer.
“What is risky right now, and the experience in South Australia of course has shown that, is the reckless and ideological pursuit of state-based 50 per cent renewable energy targets which have put the security of our energy system at risk.”
The Greens have joined Labor in criticising the government’s plan.
“The idea that Malcolm Turnbull would use the clean energy bank to fund clean coal is like using the Medicare budget to subsidise cigarettes.”