Australian PM Tony Abbott says clean energy funding should go into developing less established technologies

Abbott defends funding cut for solar and wind energy

Australian Prime Minister Tony Abbott has defended his decision to divert clean energy funding away from wind and solar power.

Abbot gave the order to the government's A$10 billion (£4.8bn) Clean Energy Finance Corporation (CEFC) to stop investing in wind and solar power yesterday, but today he responded to criticism of the move by saying the funds would be put to better use in less established clean technology.

The Prime Minister has already scrapped a carbon tax and an emissions trading plan last year and recently cut the country's renewable energy target. Opposition politicians, investors and green groups said the move would further isolate Australia, ahead of talks in Paris this December aimed at securing a United Nations climate deal.

"The best thing that the Clean Energy Finance Corporation can do is invest in new and emerging technologies, the things that might not otherwise get finance," Abbott told reporters today. "That's why we've got this draft direction there."

The Prime Minister has made no secret of his desire to axe the CEFC put in place by the previous Labour Party government, but his conservative coalition government does not control the Australian Senate and he has twice failed to abolish the CEFC through parliament.

The country is one of the world's biggest carbon emitters on a per capita basis, and Labour Party Shadow Environment Minister Mark Butler called the directives part of a larger "war on renewable energy" that would isolate Australia internationally and allow Abbott to circumvent his lack of support in parliament.

Wind farms are Australia's number two renewable energy source, behind hydropower and ahead of solar, providing a quarter of the country's clean energy and 4 per cent of its total energy demand.

Last year’s announcement that the government wanted to cut Australia's Renewable Energy Target (RET) saw investment in the £8.4bn sector freeze, but last month General Electric said it would help fund a £224m wind farm, Australia's third largest, after political leaders ended a deadlock over state subsidies.

However, the uncertainty around renewables is increasingly alarming foreign investors according to Warwick Forster, an Australia-based energy trading manager for wind farm company Union Fenosa, owned by Spanish energy giant Gas Natural.

"Being the child of a parent organisation in Europe, all these announcements about cutting back and reduced targets has certainly added concerns about sovereign risk of investing in Australia," he said.

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