The establishment of the Clean Energy Finance Corporation is the Government’s key new initiative to stimulate greater investment in the renewable, clean energy and energy efficiency sectors. The Government also plans to streamline existing renewable energy programs through the creation of the Australian Renewable Energy Agency and boost grant funding available for manufacturing and the development of low pollution technologies through the Clean Technology Program.
Clean Energy Finance Corporation (CEFC)
The Clean Energy Finance Corporation will have a fund of $10 billion over five years (from 2013) to invest in the commercialisation and deployment of renewable energy, low emissions technology and energy efficiency technology in Australia.
The objective of the CEFC is to overcome capital market barriers and it is intended to make a positive return on its investments. The capital returned from the CEFC’s investments will be reinvested.
An Expert Review Panel was appointed in October 2011 to advise the Government on the implementation of the CEFC, its investment mandate and governance arrangements. The Panel’s report was released in March 2012. Click here for our analysis of the report.
The Government intends to introduce the enabling legislation for the CEFC “in the coming Budget sittings”.
The CEFC will commence operations on 1 July 2013.
Australian Renewable Energy Agency (ARENA)
ARENA has been established as an independent statutory authority and will commence operations on 1 July 2012.
A number of existing programs that support research and development, demonstration and commercialisation of renewable energy technologies will be consolidated and transferred to ARENA including the Solar Flagships Program, the Australian Solar Institute and the Australian Biofuels Research Institute (amongst others).
ARENA will administer funding of $3.2 billion over nine years from 2011-12. It will also receive future funding from discretional dividends paid by the CEFC and potentially a share of the CPM revenue. It is intended that projects funded by ARENA will provide a potential pipeline of projects for the CEFC.
The Government expects that its renewable energy initiatives will drive up to $100 billion in new investment in renewable energy between now and 2050.
Clean Energy Finance Corporation (CEFC)
The Clean Technology Program is the main potential source of grants for businesses and is designed to help improve energy efficiency in manufacturing and support research and development in low pollution technologies. It will be allocated a fund of $1.2 billion over seven years from 2011-12.
The Program comprises the following three components:
- Clean Technology Investment Program ($800 million over seven years from 2011-12) - Competitive grants to eligible manufacturers for purchases of energy efficient capital equipment and low emissions technologies. The Government will link the grant to the amount of industry funding, with the grant ratio dependent on the size of the grant and the turnover of the applicant. The minimum grant is $25,000 and there is no maximum. Applications for these grants are open and can be lodged through http://www.ausindustry.gov.au/. Applications can be submitted at any time.
- Clean Technology Food and Foundries Investment Program ($200 million over six years from 2011-12) - Competitive grants for manufacturing businesses in the metal forging and foundry sector and the food processing sector to invest in energy efficient capital equipment and low emissions technologies, processes and products. Again, the Government will link the grant to the amount of industry funding, with the grant ratio dependent on the size of the grant and the turnover of the applicant. Applications for these grants are open and can be lodged through http://www.ausindustry.gov.au/. Applications can be submitted at any time.
- Clean Technology Innovation Program ($200 million over five years from 2012-13) - Competitive grants to support business investment in research and development in renewable energy, low-emissions technologies and energy efficiency. A grant of $1 will be available for every $1 of industry/organisation funding. Grants range from $50,000 to $5 million. Applications for these grants are open and can be lodged through http://www.ausindustry.gov.au/.