CEFC expands clean energy investment in South Australia with new energy efficiency projects

12 December 2017

The Clean Energy Finance Corporation (CEFC) is helping demonstrate the diverse potential of energy efficiency programs by helping finance clean energy improvements to two Adelaide buildings, under the South Australian Government's new Building Upgrade Finance (BUF) initiative.

The YourDC data centre is a 6,000 square metre specialist facility in suburban Edinburgh Parks, while the 26 Flinders Street commercial property is a 15-storey office tower in the heart of the Adelaide CBD.  Both buildings are installing equipment that will reduce their grid energy use and lower their carbon emissions.

The businesses accessed finance through Eureka Real Assets, a subsidiary of AXA IM - Real Assets, a global leader in real assets investment. Eureka draws on finance provided by the CEFC and NAB.

Including these latest two projects, the CEFC has announced finance to five South Australian developments since August this year.

CEFC CEO Ian Learmonth said "We are delighted to see more South Australian projects working with CEFC finance to invest in clean energy.

"In addition to these two exciting projects, CEFC finance is powering energy saving lights at Adelaide Oval, building a 10MW battery energy storage system as part of the Lincoln Gap wind farm and supporting the development of innovative new energy efficient student accommodation in Adelaide.

"These investments are all making a positive contribution to the South Australian economy and to long-term reductions in carbon emissions."

CEFC Building Upgrade Finance spokesperson Yolande Pepperall said the South Australian enthusiasm for the Building Upgrade Finance initiative and the recent Adelaide Oval upgrade were encouraging signs that business owners were increasingly undertaking energy efficiency and renewable energy projects.

"It makes a lot of sense to invest in building upgrades that will result in reduced base building energy use and lower carbon emissions well into the future," Ms Pepperall said.

"While property accounts for almost a quarter of Australia's carbon emissions, there are proven technologies that can dramatically improve this situation. In fact, cost effective energy efficiency technologies could deliver an estimated $20 billion in energy savings by 2030.

"Building Upgrade Agreements help break down the financing barriers faced by commercial property owners and have already demonstrated their success in New South Wales and Victoria. Through our finance agreement with Eureka Real Assets, we look forward to seeing more South Australian properties tap into similar energy efficiency gains."

South Australia's largest and most energy efficient data centre, YourDC, is housed in a converted industrial manufacturing building. YourDC is installing a 199kW rooftop solar system from ZEN Energy that is forecast to deliver electricity at an effective cost of just over 4c per kWh over the life of the system, less than 25 per cent of its current grid electricity tariffs. The solar will also reduce the building's greenhouse gas emissions by 3,728 tonnes over the life of the system. The CEFC has committed up to $153,000 towards the YourDC solar project.

The commercial office block at 26 Flinders Street has commenced an upgrade that includes installing around 30kW of Solar PV, upgrading to LED lighting, installing power factor correction equipment and façade greening. The CEFC has committed $150,000 towards the Flinders Street retrofit.

The South Australian Building Upgrade Finance mechanism is designed to tackle market barriers that often impede commercial building upgrades from going ahead.  These barriers include access to the capital to fund upgrade projects, and the split incentive between landlords and tenants in leased buildings, where the building owner incurs the cost of the upgrade, but the tenant receives the benefits through reduced utility bills and improved accommodation.

Through the BUF, councils can voluntarily enter into a building upgrade agreement with a building owner and a financier. Finance for eligible improvements is tied to the building rather than property owner, with loan repayments collected via a local government charge and passed on to the financier.