If you were one of the many voters who casted your US Presidential ballot in the hopes of seeing your country embrace green energy – I’m afraid I have some bad news.
While Obama serving a second term would appear to be a boon for wind and solar power initiatives, there’s a stark reality: His $787 billion American Recovery and Reinvestment Act (ARRA) is about to run dry.
And so far, there’s been little to show for.
Taking a look at the latest stats from the White House’ official www.recovery.gov website, it shows that $772 billion from the stimulus program has already been paid out.
Out of this massive amount, $90 billion was earmarked for green energy projects.
The plan was expected to generate 200,000 jobs per year for Americans.
A quick glance on the website’s tracker shows just a little over 135,000 jobs have been created since the Recovery Act was put in place – nearly four years ago.
Couple that with the so-called fiscal cliff approaching on January 1st – and the likelihood of green energy initiatives making any significant headway in 2013 seems more like wishful thinking.
By the end of this year, the Production Tax Credit (PTC) is also set to expire with little certainty that it will be extended. This credit subsidized nearly 30% of wind-energy project costs in America.
The fate of other energy tax breaks also hangs in the balance as the government continues to wrangle over finances and environmental regulations.
Needless to say, the sustainability buzz is waning in America.
Perhaps if even a tenth of the 5 million jobs promised through ARRA was created by this time, Obama can at least claim that legitimate progress is being made.
But once again, our government has managed to take us on a magic carpet ride leading to nowhere.
Having said that though, not all is lost for green investors.
In fact, let me take you on a trip to the Land Down Under to show you what a real green investment opportunity looks like…
You see, Australia is embarking on a green energy plan of its own – one that’s capable of generating 100 percent of its power from renewable sources by 2020.
Australia’s Clean Energy Future
It’s an ambitious goal to say the least, but not impossible.
According to a 2010 Energy Resource Assessment undertaken by the Australian Bureau of Agricultural and Resource Economics (ABARE), it’s estimated that the annual solar radiation falling on Australia is about 58 million petajoules – or roughly 10,000 times the nation’s energy consumption.
So while Germany and Italy may be the two biggest adopters of solar power at the present time, the two countries combined are just a tenth the size of Australia.
In other words, it’s not a question of whether renewable energy could power all of Australia – but whether there is a business case for doing so.
The good news is, we’ll find out soon enough.
Under Australia’s Clean Energy Plan, AU$8.6 billion (US$8.9 billion) will be provided over the next three years to safeguard clean energy jobs, while AU$3.2 billion has been allocated to the Australian Renewable Energy Agency (ARENA) to fund clean energy projects.
Although the scope of the Aussie program pales in comparison to the $90 billion doled out by the US…unlike Obama’s plan, Australia isn’t writing checks to just any applicant with a grand ‘carbon-free’ scheme.
Earlier this month, both a AU$700 million solar farm proposal from EnergyAustralia and a AU$1 billion solar-thermal plant project from Areva SA failed to get approval for ARENA funds.
It was primarily due to their inability to bankroll the rest of the money they required.
As you can see, while our President promised accountability, the Australians are demanding accountability before a single dollar is even spent.
Now that’s good money management. Or as I’d like to call it: common sense.
But even with these two mega projects rejected, the program definitely isn’t short of applicants.
Two other proposals are currently under serious consideration by ARENA.
The AU$623 million Pacific Hydro Pty. Solar Farm and the AU$200 million Suntech-Infigen Solar Farm are next up for review, and a decision could be made as early as next spring.
As ARENA’s funds need to be distributed by 2015, you can be sure that competition will be fierce. But as I had noted above, the Aussies aren’t afraid to slam the brakes on the frontrunners.
With these high-profile rejections, the bar has been raised – other companies will need to bring nothing less than their A-game to the negotiating table.
Yet regardless of government subsidies, clean energy power generation in Australia has grown astronomically in the past few years.
Between 2009 and 2011, solar capacity has shot up an astounding 617 percent to 1.345 billion megawatts. Wind power capacity meanwhile, rose over 27 percent during that same span.
Needless to say, renewable energy projects are ramping up full-throttle, and companies are merely scratching the surface of this vast country.
Whether or not Australia becomes the Saudi Arabia of renewable energy before the decade is out, one thing’s for certain: they won’t have to worry about running out of this fuel source for a long, long time.
And with the way their government is managing the industry’s growth, investors won’t have to worry about being duped by big promises either.
Australia’s clean energy future is a bright one… it’s time to look for investment opportunities down under.
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