The Clean Energy Finance Corporation has received its biggest investment boost in more than a decade as it ramps up project work on the path to net zero, writes Gavin Dennett.
The Clean Energy Finance Corporation (CEFC) has announced its first major injection of capital in more than a decade, with the Federal Government allocating $20.5 billion to contribute towards Australia’s energy grid infrastructure, and the establishment of two funds to stimulate clean energy opportunities.
The CEFC was established in 2012 with a capital allocation of $10 billion from the government. Australian Parliament recently passed the Treasury Laws Amendment (2022 Measures No. 4) Bill 2022, which locks in a further $11.5 billion in capital, allowing for a further $9 billion to be added for future initiatives.
This government funding will contribute to ongoing CEFC investment across renewable energy, emerging cleantech and hydrogen.
The $20.5 billion capital will contribute to the creation of three new CEFC investment priorities:
- $19 billion allocation to help deliver the Rewiring the Nation program, with investments including high-voltage transmission, long-duration grid storage and electricity distribution network infrastructure.
- $1 billion allocation to create the Household Energy Upgrades Fund, providing discounted consumer finance to increase sustainability in Australia’s housing sector.
- $500 million allocation to establish the Powering Australia Technology Fund to support clean technology projects and facilitate the development, commercialisation and uptake of clean energy technologies.
“This is significant support by the Australian Government and Parliament for our work as Australia’s ‘green bank’ in investing on behalf of all Australians in our low-emissions future,” says CEFC chair Steven Skala.
“The Rewiring the Nation program, Household Energy Upgrades Fund and Powering Australia Technology Fund substantially expand the role of the CEFC. New large-scale investment in priority grid infrastructure projects complement our existing work in transforming our energy system and bringing the benefits of decarbonisation to key sectors of our economy.”
From 2012 to the end of 2022, the CEFC had made lifetime investment commitments of $11.7 billion. After repayments and returns on its investments, the “green bank” had $4.6 billion available for ongoing investment from its original $10 billion funding allocation. This latest funding boost represents a seismic shift in its renewables investment potential.
CEFC CEO Ian Learmonth says the additional capital will enable the CEFC to make a significant contribution to the achievement of net-zero emissions by 2050.
“We expect to make substantial grid-related investment decisions within the next 12 months,” he says. “While these transactions are often large and complex, we must move quickly to invest in the expansion and augmentation of our grid and related infrastructure to deliver on Australia’s net-zero objectives.”
“Analysis from the Intergovernmental Panel on Climate Change provides an important reminder of the scale of the climate challenge and the urgency to accelerate meaningful action this decade. In Australia, this means transforming our energy system to low-cost, low-emissions renewables, backed by large-scale energy storage and a modernised two-directional grid, connecting distributed generation with industrial, commercial and residential power users.
“At the intersection of this revolution in low-emissions energy generation and distribution is government and private sector capital, delivered via tailored investment models that leverage considerable market momentum towards sustainable green investment opportunities.”