Australia’s clean energy investment agency is broadening its focus from renewable energy to drive growth in the hydrogen industry and improve the electricity network’s ability to accommodate the growing volume of wind and solar power in the grid.
Announcing the Clean Energy Finance Corporation’s results for the past financial year, chief executive Ian Learmonth said the agency had made investment commitments of more than $1 billion into 23 clean energy investments, which leveraged a combined value of $4.2 billion of co-investment from private industry.
The CEFC, which is governed by a legally binding investment mandate to promote renewables, low emission technology and energy efficiency, received a record sum of finance through repayments, sales and redemptions over the past 12 months, reaping a total of $942 million.
Mr Learmonth said the CEFC would continue to invest in renewable energy projects, but the next year would mark a “real evolution”, with a focus on hydrogen projects with a new $300 million fund to promote the nascent technology.
The $1 billion Grid Reliability Fund, which was announced last year by the Morrison government, comes as additional funding on top of the $10 billion allocated when the agency was established in 2012.
Energy and Emissions Reduction Minister Angus Taylor said CEFC’s impending work on hydrogen and grid reliability were “clear examples of the government’s ongoing commitment to accelerating new technologies and confirming Australia’s place as a global leader in low emissions technologies”.
Mr Learmonth said the CEFC, which has also made investments to support lowering emissions in agriculture, infrastructure, transport and waste management, would continue to attract private investment in job-creating energy and industry projects to help the economy recover from the coronavirus downturn.
“We are very conscious of playing a meaningful role in the post COVID recovery,” Mr Learmonth said.
“We’re getting back nearly a billion dollars a year, and we wrote nearly a billion dollars in transactions, there’s plenty of firepower there to address the stimulus.”
In May, Mr Taylor accepted the recommendations from the King Review of the Climate Solutions Fund, which also included advice that government should change legislation governing the CEFC to a “technology-neutral remit so they can support key technologies across all sectors”. This would include carbon capture and storage (CCS), which along with nuclear power, the CEFC is currently barred from funding.
CCS can be used to remove the emissions from coal and gas-fired power plants, as well as gas-fired industry such as smelters.
Opponents of CCS argue the costly technology is not economically viable, extends dependence on fossil fuels and delays clean technologies like large scale wind and solar generation, or electric heating technology to replace gas in industry. Proponents argue that all technology should be considered in the transition to a low emissions economy and CCS can enable existing industrial infrastructure to continue to operate, as well as preserving jobs in coal and gas production.
The Morrison government’s response to the King Review said in-principle the CEFC should provide support to the widest range of low emissions technologies.
It remains to be seen if laws will be changed to expand the CEFC’s remit.
Mr Taylor said the government’s “technology not taxes” approach to emissions reduction would be particularly important post-COVID.
“Reducing emissions without imposing new costs on households, businesses or the economy is central to the Government’s Technology Investment Roadmap,” Mr Taylor said.
Get our Morning & Evening Edition newsletters
Mike is the climate and energy correspondent for The Age and The Sydney Morning Herald.