Antinuclear

Clean Energy Finance Corporation is the key to Australia’s chance to be Renewable Energy Superpower

despite the higher investment hurdle to be cleared when the CEFC makes any new loan, it has managed to continue to unveil new projects such as the launch this month of a $100 million, 12-year fund with Origin Energy to promote more commercial use of solar panels, with more to be announced within days

Australia can be a global solar and wind superpower, and the CEFC is the key July 13, 2015  Peter Hannam Environment Editor, The Sydney Morning Herald

Australia is perfectly placed to become the next global superpower of renewable energy, the “Saudi Arabia of solar” for the coming century.

While Saudi Arabia has barrels of oil, we have an abundance of sunlight to fuel solar power and wind to power turbines, plus enough geographical space, modern infrastructure and a stable political system to house such an industry on a massive scale.

But if Australia is to realise its remarkable renewable energy wealth, (see chart below, published by the Melbourne Energy Institute, revealing its world-beating solar exposure as indicated by the lighter colours on the map), banks and investors will need to active players.

Despite what the government has been saying, the role of the CEFC has never been to back emerging or even “mature” renewable energy technologies. That role belongs to the Australian Renewable Energy Agency – which the government would also like to abolish if it could get the numbers in the Senate.

Why there is a need for a green investment bank is that our banking industry is not particularly innovative when it comes to backing new technology – whether renewable energy or other sectors.

Accounting rules typically demand investments pay off within very short periods, adding to the reluctance by many companies to invest in energy savings as well as renewable energy ventures.

In finance-speak, the CEFC exists to “de-risk” the sector so that banks and companies venture where they would not otherwise do so, much like we help agriculture or even exports.

Major banks such as Commonwealth and NAB are among those partnering with the fund on a range of projects. As one insider put it, the ultimate aim of the CEFC is to create “a distinct green asset class” that will attract more investment and more attention to the sector.

Most banks, for instance, don’t have the in-house ability to conduct due diligence on many of the projects without outside help, which is what the CEFC brings to the deal.

As banks gain expertise and confidence, more interest and funding will flow and the fund won’t be needed. But that’s not the case now in Australia or in the many countries which operate similar “green banks” such as the UK and the US.

In unhelpful timing for the Abbott government, the CEFC is also expected to release its latest annual results this week showing that it is delivering a positive return on its investments to date.

Harder to fathom

The government’s efforts to change the mandate of the CEFC to exclude investment in large-scale wind farms or solar panel programs adds to a confusing approach to the sector………..

the government has been trying to end both ARENA and now the CEFC.

Mr Abbott failed to abolish the Australian Renewable Energy Agency (ARENA), the body set up to fund emerging technologies, but it stripped out most of its near-term financing.

In February, Mr Hockey and Finance Minister Mathias Cormann used their powers to make it more expensive for the CEFC to lend any of its funds. Instead of using the government’s long-term bond rate, the government raised that bar by an additional 4.5 percentage points, more than doubling it……..

On Monday, the fund said it was “taking advice” about who the latest changes would affect its operations.

However, despite the higher investment hurdle to be cleared when the CEFC makes any new loan, it has managed to continue to unveil new projects such as the launch this month of a $100 million, 12-year fund with Origin Energy to promote more commercial use of solar panels, with more to be announced within days.  http://www.smh.com.au/environment/climate-change/australia-can-be-a-global-solar-and-wind-superpower-and-the-cefc-is-the-key-20150713-giariy.html#ixzz3gDPH45xN

July 18, 2015 - Posted by Christina Macpherson | AUSTRALIA - NATIONAL, energy