Following the release of the IPART report this week, Expert Review Panel has issued directives to the Australian government on the Clean Energy Finance Corporation (CEFC). The CEFC will finance Australia’s clean energy in order to address the barriers currently inhibiting investment.
Expected to commence operations next July, the AUD$10 billion CEFC has been set up to provide funding to a broad range of renewable projects, with a focus on large-scale projects. Smaller projects would need to turn to third-parties for financing. However, the CEFC requires that all projects are co-financed alongside private sector investments as well as the CEFC.
This could also cover hybrid projects as well as supporting infrastructure. Investment in projects to create renewable energy certificates are also a priority. Eligible projects will be required to achieve an emissions intensity of 50% or lower than the electricity grid average – 0.415 tonnes of CO2 per megawatt hour of electricity.
“The AUD$10 billion Clean Energy Finance Corporation will supercharge solar investment”, said AuSES chief executive, John Grimes.
“AuSES supports the stated objective of the CEFC – to apply capital through a commercial filter to facilitate increased flows of finance into the clean energy sector thus preparing and positioning the Australian economy and industry for a cleaner energy future.
“The government has an important role to play in leveraging private sector investment. As the report notes, the transformation to a clean energy future will require substantial capital which the private sector alone may not be able to provide.”
However, Climate Spectator has found a couple of holes in the report. It states that the CEFC should be financing on a project-by-project basis. And equally, the publication states that funding should be provided through up-front commitments.
This is all relative, admits the publication. Essentially, as the CEFC will not be implemented until next summer, this will not provide it with enough time to prove to be a worthwhile investment by the time of the next election. Polls in Australia suggest that the current coalition government will lose the election, allowing for the current opposition leader Tony Abbott to abolish the CEFC.
AuSES remains hopeful, “Together with the new leader of the Australian Greens, Senator Christine Milne, Bob Brown made a major contribution to the development of the legislative package that will supercharge solar in Australia – the 20% Renewable Energy Target, carbon pricing, the AUD$10 billion Clean Energy Finance Corporation and the AUD$3.2 billion Australian Renewable Energy Agency. AuSES looks forward to working with Senator Milne in her new capacity.”
Yesterday, PV-Tech reported that Australian Energy Minister Chris Hartcher is calling for an end to the yet to be implemented Renewable Energy Target (RET) because it could cause increases to energy bills. However, the IPART report and AuSES both attain that inadequate infrastructure maintenance is the primary cause for the augmentation in electricity prices. The not-for-profit organisation AuSES claims AUD$100 billion is required to make the necessary maintenance.
Grimes states: “The Energy Market Regulator says 94% of the price rises are down to this single fact. It is dishonest to blame solar and other renewables for this shameful situation.
“The price on carbon is designed to encourage polluting generators to look at smarter, cleaner, more sustainable ways to provide electricity, because they have demonstrated they are not going to change without a financial penalty.”