The head of Australia’s Clean Energy Finance Corporation (CEFC) has predicted a revival in investor interest in the country’s renewable energy sector following political agreement on its Renewable Energy Target (RET).
This week’s settlement will see Australia’s 2020 renewables target slashed by 20%, following months of political wrangling.
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But CEFC chief executive Oliver Yates said agreement on the target, which now stands at 33,000GWh by 2020, would open the way once again for continued development of renewables in Australia. Activity particularly in the large-scale segment has slowed almost to a standstill as the future of the RET has been debated.
“Increased certainty around the future of the RET should provide investors with greater confidence in the further development and diversification of Australia’s clean energy sector,” Yates said.
“The Clean Energy Council has highlighted that between 30 to 50 major renewable energy projects and many more mid-sized projects will need to be built over the next five years. The market should now benefit from lower risk premiums for financiers, which in turn can lower the overall cost of developing new projects. This will help ensure Australia can continue to expand and deploy a diverse range of innovative technologies to help meet its future energy supply needs in a low-carbon economy.”
Bloomberg New Energy Finance analysis has estimated a further 8GW of large-scale renewables generation will be required to meet the 33,000GWh target, needing AU$15 billion of investment. Of this around 2.6GW is expected to come from large-scale PV.
“The CEFC plays a complementary role supporting the RET, investing alongside private sector co-financiers to facilitate increased flows of finance into the clean energy sector. The CEFC will continue to fulfil its purpose by investing in technologies that have not yet been widely deployed at the utility scale in Australia, supporting new financing structures which that catalyse private sector investment in renewable energy technologies, and by working to bridge the financing gap for projects using proven technologies that are unable to secure long-term power-purchase agreements,” Yates added.