The past 12 months have seen the CEFC evolve as an organisation. Today, we are increasingly well equipped to address the challenges of Australia’s transition to lower emissions, founded on the development of a stronger, cleaner and more reliable energy grid.
The CEFC continues to play the catalytic role in the Australian clean energy sector that has characterised our first six years of operation. Our sound record of achievement gives the market confidence to follow our lead. As we extend our scope into new territories and new technologies, we are fortified by a strong market presence, a robust investment pipeline and an enduring commitment to invest with commercial rigour on behalf of Australian taxpayers.
In the 12 months to 30 June 2019, we committed almost $1.5 billion in new investments across 30 projects with a total value of $6.3 billion. This included almost $1 billion in renewable energy, and more than $500 million in energy efficiency and low emissions projects.
New commitments 2018–19
Our capital continues to crowd in private sector investment. We are proud to report that, since inception, CEFC investments have helped drive more than $24 billion in additional private sector investment commitments Australia-wide.
The projects we have invested in are aiming to reduce Australia’s greenhouse gas emissions by an estimated 260 million tonnes of CO2-e over their lifetime, making a considerable contribution to the national emissions reduction effort.
During the past year we have also seen the ongoing maturity of the renewables sector, with the Renewable Energy Target of 33,000 GWh delivered some 12 months ahead of schedule, reflecting the dynamic wind and solar markets across the country.
As a result, we recognise there are complex grid challenges ahead and we are increasingly targeting complementary projects and technologies to improve the security and reliability of our electricity system. This work will support the transition to a low emissions economy, powered by a higher share of Australia’s abundant renewable energy resources. We look forward to supporting both the projects and the technologies necessary here, including large-scale batteries, pumped hydro and potential grid related infrastructure.
Some of the CEFC’s most exciting recent investments are helping solve the nation’s most intractable energy and emissions challenges.Ian Learmonth
Our new Clean Futures Team is focused on delivering clean energy outcomes in areas where investible opportunities are still emerging, such as hydrogen and biofuels, and where such opportunities can sometimes be commercially challenging. This specialist team is collaborating with key market participants, such as AEMO and ARENA, governments and the private sector. We welcome this shared commitment to identify and address the economic and structural barriers to Australia’s clean energy transition.
Some of the CEFC’s most exciting recent investments are helping solve the nation’s most intractable energy and emissions challenges.
Waste, and its contribution to greenhouse gas emissions as landfill, increasingly poses such a challenge. Our investment in Australia’s first large scale energy-from-waste plant in Kwinana near Perth is a great example of innovation, delivering better waste management as well as clean energy to power local communities. When operational, the plant will produce cost-competitive baseload renewable energy for the WA South West Interconnected System, producing 36MW of electricity – enough to power up to 50,000 homes.
In South Australia our $100 million commitment to help finance home battery systems will also contribute to cleaner, more affordable and reliable energy in that state.
Transaction value 2018–19
The opportunities to embed energy efficiency across more sectors, such as agriculture, infrastructure, property, transport and resources, continue to form a significant part of our activities, alongside continued efforts to strengthen our large-scale solar and wind sectors.
Buildings account for around 20 per cent of Australia’s energy use and therefore offer great scope for improvement through the inclusion of clean energy initiatives that can reduce energy costs and lower emissions. Our work with Mirvac to embed clean energy technology as part of the base build in residential communities in Sydney and Brisbane will result in new homes that include built-in solar and battery storage systems, high-grade insulation, LED lighting and energy efficient appliances. We see this as an exciting model for future developments.
Our $200 million Clean Energy Innovation Fund, which we operate with the support of ARENA, continues to invest in the technologies of the future by supporting early-stage companies. Our investment this year in Omni Tanker is helping this exciting Australian company scale-up its business to meet international demand. Omni Tanker manufactures cutting edge carbon fibre tanks that are lighter than conventional steel tanks, which means that transporting them uses less energy and produces fewer emissions. We were also delighted to increase our investment in Victoria’s Carbon Revolution, another innovative home-grown company taking its carbon fibre wheel technology to the world.
A commitment to innovation extends across our portfolio. During the year we were pleased to support the creation of Australia’s first carbon neutral equities fund, which will work with leading Australian listed companies as they accelerate their transition to lower carbon emissions. The creation of Warada Capital, our first joint venture, will see us become more closely involved in project development, design and implementation, while ensuring a pathway for potential further investment in projects at financial close.
Of course, we are not in this alone. The CEFC’s achievements come through positive collaboration with entrepreneurs, developers, businesses, investors large and small, a wide range of industry bodies, and local, State and Commonwealth government. This collaborative approach is central to the staff of the CEFC and is in fact one of the new Values we adopted this year, alongside impact, integrity and innovation.
In addition to my own frequent engagement with the market as CEO, during the year we sought market feedback about experiences in working with the CEFC. We welcome the trust placed in us by those we work with and will continue to earn that respect.
We appreciate the engagement and guidance of our Board under Chair Steven Skala AO, and our constructive working relationship with the Minister for Energy and Emissions Reduction, the Hon Angus Taylor MP and the Minister for Finance, Senator the Hon Mathias Cormann.
Lifetime emissions 2018–19 commitments
We also acknowledge the positive support and professionalism of the Department of the Environment and Energy.
The CEFC is grateful to work alongside the ARENA team: their knowledge and professionalism are making important inroads in early-stage market participation.
As we evolve, the CEFC’s investments will continue to be guided by the deep industry knowledge of our expert team and a clear understanding of our role as a caretaker of taxpayer funds.
This year Prime Minister, the Hon Scott Morrison MP described the CEFC as the “world’s most successful green bank”. The Executive and staff of the CEFC value this reputation. We recognise that it is built on our work over many years as a prudent investor and market catalyst and we are determined to uphold these high standards in years to come.
Chief Executive Officer