Australia’s green bank, the Clean Energy Finance Corporation, has reaffirmed its commitment to underwriting the transition to a renewable electricity grid, pointing to a new financial year focused on opportunities in hydrogen, batteries, virtual power plants and pumped hydro.
In its Annual Report for 2019-20, published on Tuesday, the CEFC said it would will prioritise investment in innovative technology and financing solutions to further accelerate emissions reduction in the year ahead.
This included fast-tracking measures to bring the electricity grid up to speed, investing in large-scale energy storage solutions, and backing emerging opportunities in hydrogen, the report said.
“For the year ahead, we are focused on investing in a secure, affordable and sustainable energy system, to increase the share of renewable energy in a modernised electricity grid,” said CEFC chief Ian Learmonth.
“The excitement around hydrogen and recycling signals the very strong potential of these technologies to deliver a step change in emissions reduction.
“We will also accelerate efforts to drive down emissions from buildings, agribusiness and infrastructure, and continue to back the cleantech sector, where innovative startups are transforming the way we farm, drive and even receive our home deliveries,” he said.
The report noted that green bank had continued its strong financial performance over the 2019-2020 financial year, despite the ravages of Covid-19, with almost $942 million in finance repaid or recouped, alongside revenue of $205 million.
The report also detailed investment commitments of more than $1 billion, supporting investments with a combined value of $4.2 billion in the year to 30 June 2020 and targeting more than one million tonnes of carbon abatement annually.
The reassertion of what the CEFC does best – and has done, since its formation in 2012 under the Labor Gillard government – comes amid concerns the Morrison government plans to open up the investment fund to fossil fuel projects, and other preferred technologies, such as carbon capture and storage.
The proposed legislative amendments being pursued by federal energy minister Angus Taylor have recently been the subject of vigorous debate in a Senate Inquiry.
While the amendments would see an additional $1 billion in funds allocated to the CEFC as part of the Morrison government’s Grid Reliability Fund, they would also hand greater control of the agency’s investments to Taylor, and could see its money used to underwrite potentially loss-making fossil fuel projects.
These concerns were further fuelled by the September unveiling of the federal Coalition’s controversial Technology Roadmap, which promised to deliver a 250 million tonne reduction in annual emissions by 2040, and $18 billion in government investment in new ‘low emissions’ technologies by 2030.
As RenewEconomy reported at the time, there has been little explanation of how these numbers would be achieved, which suggests that the funding envelope could only be met by recycling Gillard-era investments, and could require the CEFC to sell some $8 billion in assets.
The move to repurpose funding dedicated to supporting Australia’s emerging clean energy sector has been broadly criticised, including by former ARENA chair Greg Bourne, who said it showed how “desperate” the Morrison government was to support the fossil fuel industry.
“Rather than focusing on past technologies, the government should be driving for a cleaner future. Only a renewables-led future makes economic sense. Propping up failing fossil fuels and commercially non-viable technologies like CCS is a waste of taxpayers’ money,” Bourne said.
And the CEFC’s inaugural CEO, Oliver Yates, added his voice to the growing list of critics just last week, telling a Senate inquiry that plans for the agency to invest in ‘dirty deals’ were dangerous.
“Any attempt to change the way the CEFC invests, making it invest in dirty deals or loss making investments, could destroy it’s very important global demonstration role and slow down global action on climate change,” Yates said.
In his letter accompanying the annual report, Learmonth said 2019–20 demonstrated that the deployment of CEFC capital, combined with unparalleled financial and industry expertise, was vital to the decarbonisation of the Australian economy and the renewables growth.
“Our investments in 2019–20 reflect success in our role as catalysts for change, leading the market with pioneering investments across agriculture, cleantech, clean energy generation and storage, infrastructure, property, transport and waste,” he said.
Interestingly, carbon capture and storage is mentioned only twice in the 220-page CEFC report, once in a summary of the Morrison government’s Technology Investment Roadmap, and once in a summary of the CEFC Act.
The latter reference to CCS reminds us that the Act, as it stands, “expressly excludes CEFC investment in carbon capture and storage, nuclear technology and nuclear power.”
In a statement from CEFC chair Steven Skala, however, Skala says exciting prospects for investment continue to emerge, including through the anticipated Grid Reliability Fund, as well as those noted in the Australian Government Technology Investment Roadmap.
“This may also involve investment in transitional technologies that may play a critical role in supporting the energy system,” he said.
But Skala also noted that “since inception, sound financial management has been a hallmark of CEFC operations.”
“In 2019–20, challenging economic conditions highlighted the importance of this commitment to prudent investment,” he said.