Australia has a number of Federal and State-based financial initiatives in place to support clean energy investment, research and development. At a Federal level, the Clean Energy Finance Corporation (CEFC) was established to facilitate increased finance into the commercialisation and deployment of Australian based renewable energy, energy efficiency and low emissions technologies. The CEFC operates like a traditional financier and works with co-financiers and project proponents to determine ways to secure financing solutions for projects in the clean energy sector.
The CEFC is a statutory Commonwealth authority, which was established, and operates under, the Clean Energy Finance Corporation Act 2011 (Cth) (CEFC Act). CEFC investment opportunities are governed by the CEFC Act, any regulations made under the CEFC Act (of which there are currently none), the CEFC Investment Mandate and any policies made under the CEFC Act. The CEFC commenced funding investments from 1 July 2013 and has access to funding of $10 billion over a five year period, comprised of annual appropriations to the CEFC Special Account of $2 billion every 1 July from 2013 to 2017 inclusive. After its first full year in operation, the 2013-14 financial year, the CEFC contracted investments of over $900 million in projects totalling over $3 billion in value. Further information about the CEFC can be found here.
Another Federal initiative is the Australian Renewable Energy Agency (ARENA), a commercially oriented agency established on 1 July 2012 by the Australian Renewable Energy Agency Act 2011 (Cth). ARENA has two objectives:
- to improve the competitiveness of renewable energy technologies; and
- to increase the supply of renewable energy in Australia.
ARENA has approximately $2.5 billion of legislated funding until 2022 ‘to invest in projects and initiatives that hasten the commercialisation of renewable energy solutions and diversify Australia’s energy mix.’ Investments span the commercialisation pathway from research and development to demonstration and near-commercial deployment projects. ARENA also has a mandate to capture and share knowledge from projects, and each project includes a knowledge sharing plan for this purpose. Under ARENA’s General Funding Strategy and Investment Plan, investment focus areas are identified, within which its priorities for new investment have been identified, including integrating renewables and grids, renewables for industrial processes, off-grid areas, fringe-of-grid and network-constrained areas and large-scale solar photovoltaics.
There are also various State-based initiatives in place to support clean energy investment, research and development. For example, under the Australian Capital Territory’s (ACT) Government’s legislated 90% renewable energy target (requiring 90% of Canberra’s electricity supply to be from large-scale renewables by 2020), the ACT Government has implemented renewable energy reverse auctions. To date, there have been three ACT renewable energy auctions; one for large-scale solar projects (Solar Auction) and two for wind energy projects (Wind Auction).
For the Solar Auction, in January 2012, requests for proposals were issued by the Act Government for grants of Feed-in-Tariffs (FiT) in relation to projects of up to 40 Megawatts of large-scale solar generation in the ACT. At the completion of the Solar Auction process, three proposals were granted a FiT entitlement. The first Wind Auction was announced on 12 March 2014, for grants of 20 year FiT entitlements for up to 200MW of wind generation capacity under a reverse Wind Auction process. On 6 February 2015, three successful proponents were announced, amounting to $50 million of local investment in wind power generation. A request for proposals for the second Wind Auction, for a further total of 200MW of wind generation capacity, was announced by the ACT Government on 10 August 2015. The Request for Proposals period for the second Wind Auction closed on 30 September 2015.