The Auditor General has been asked to investigate the Commonwealth Government’s Underwriting New Generation Investment Program (UNGI), which threatens to undermine investment in the essential power sector.

New research by The Australia Institute’s Climate & Energy Program reveals the Government’s flagship program to generate more electricity has no legal foundation, formal guidelines, assessment criteria, procurement process or clear implementation plan.

Key findings:

• According to advice, the UNGI program faces significant legal uncertainty
• Despite assurances in 2018, there are still no formal guidelines or criteria for project selection, nor a clear procurement process
• The agency identified to deliver UNGI appears unclear as to its role and is incapable of delivering at least one selected project
• The Federal Government has already shortlisted UNGI projects, made initial agreements and advanced detailed negotiations with proponents, and entered an MOU with the NSW Government to support projects under UNGI.

“The electricity sector is an essential service and right now it is being undermined by the Federal Energy Minister’s own underwriting program. The captain’s call to offer government support to a dozen power projects was undertaken with no transparency, guidelines or legal foundation,” said Richie Merzian, Climate & Energy Program Director The Australia Institute.

“It is worrying that despite years of problems with this underwriting program, in the last few months the Federal Government has powered on, undertaking ‘advanced negotiations’ with project proponents and signed an MOU assuring the NSW Government of its allocation of three projects.

“Contrary to the Energy Minister’s claim, the program’s criteria were not finalised in December 2018. The December 2018 documentation makes clear it lists only “indicative” criteria that would not be used without further program development, of which there is still no evidence.

“The program is so opaque even the agency appointed to deliver it, the Clean Energy Finance Corporation, appears unclear as to its role and, in one instance, unable to deliver on a promised project being a NSW coal fired power station upgrade.

“The electricity sector remains the heaviest polluting part of the economy and the underwriting program would throw more fossil fuel on the fire with taxpayer support for six gas and coal fired power plants.

“There are a number of major concerns with the design and implementation of the program that have been raised and ignored by the Federal Government, leaving few other options but to ask the Auditor General to investigate.

“In times of crisis like dealing with the COVID-19 pandemic, such dodgy programs threaten the vital trust the Australian public places in the Federal Government.”