CEFC supports diversification of Australia’s future energy mix

4 June 2015

The CEFC welcomes the release of the Clean Energy Australia Report 2014 by the Clean Energy Council (CEC) and looks forward to increased certainty surrounding the Renewable Energy Target (RET) in order to enable commercially-viable, proven, utility-scale projects to get access to finance more readily.

The Clean Energy Finance Corporation (CEFC) has over $3 billion available to invest and stands ready to work with project proponents and other financiers to develop the necessary long-term finance solutions and support required to progress these projects.

CEFC CEO Oliver Yates said: "The CEFC's access to long-term capital enables the Corporation to provide long-term financing for utility-scale projects, helping to bring down the levelised cost of energy of clean energy technologies."

"The CEFC agrees with the CEC and others across the industry concerning the need for the return of greater investor confidence in the future of the RET and long term policy settings, as this is essential to unlock further development and diversification of Australia's renewable energy sector.

The CEC has estimated that once legislated, the revised RET could potentially unlock more than $40 billion in investment in the renewable energy sector. 

"Clear long-term policy would lower risk premiums for financiers, helping to bring down the levelised cost of energy of clean energy technologies and the overall cost of deploying diversified new renewable energy capacity.

Mr Yates said that while commercially-viable, proven, utility-scale projects could be well placed to get access to private sector finance, the private sector seeks future price certainty and clear policy post 2020 would be necessary for projects to be able to secure this finance. The CEFC will continue to play a complementary role, alongside private sector co-financiers, including investing where longer term PPAs are not available and in technologies that have not been widely deployed at the utility scale to date. 

With the prospect of a bi-partisan RET agreement, independent analyst Bloomberg New Energy Finance estimates that up to 40 per cent of the RET could be met by solar over the next five years, even with the proposed reduced target. It forecasts that substantial reductions in the economics of large-scale solar by 2020 will enable the commissioning of as much as 2-3GW of solar capacity under the Large-scale Renewable Energy Target (LRET).

The CEFC is very encouraged by the trajectory of utility scale projects.  "We are seeing a continued global and domestic trend downward with utility scale project costs.  We encourage the diversity of renewables within the energy supply system and expect solar to play an increasing part".

"The predictability of solar generation, relative ease of construction and low development concerns around Australia is making it an attractive option" Mr Yates said.

Large-scale solar developments such as Solar Choice's $1 billion solar farm on Queensland's Darling Downs, FRV's 150MW solar power plant at Clare in Far North Queensland, the Collinsville Power station project and the Barcaldine Solar Farm are all progressing.

These projects are in addition to a number of large scale projects currently under construction, including Broken Hill Solar and Nyngan Solar in NSW and Kogan Creek in Queensland. The CEFC's investment in utility scale solar is helping accelerate the development of the Moree Solar farm in NSW and the expansion of the Uterne solar farm in the Northern Territory.