Renewable energy milestones
The CEFC is an active investor in the development of Australia’s considerable renewable energy resources, with our maturing portfolio featuring a combined 2.7GW of generating capacity at 30 June 2019.
Working alongside a diverse range of global and Australian investors, we have helped deliver 39 large-scale solar and wind projects Australia-wide since inception. Of these, 30 projects are now generating energy to the grid, reflecting the relatively contained development timeframes of these large and long-dated assets. We are pleased to report that CEFC finance has been repaid on three solar and five wind projects, with this finance now available for reinvestment by the CEFC.
We note AEMO’s view that solar and wind energy – complemented by 17GW of storage – offer the lowest cost replacement for retiring fossil fuel capacity. CEFC finance remains central to this evolution.
While large-scale solar and wind opportunities are showing increasing maturity – with the ability to tap a strong market for equity and debt – the investor appetite for projects with material levels of uncontracted power or “merchant risk” remains limited. In addition, projects have met challenges during the construction and connection process, including rapidly-changing marginal loss factors which have adversely impacted project revenues.
Together, these issues are placing a potential brake on continued market growth in the face of an ageing, constrained transmission network and a systems architecture that is due for fundamental change. Similarly, while early progress on potential storage-related investments was welcome in 2018–19, this market is also still evolving, with fully commercial models yet to develop.
At 30 June 2019, the CEFC large-scale solar portfolio (excluding fully repaid investments) included 22 debt-financed solar projects and two equity transactions. Together, these represent $1.1 billion in CEFC investment commitments, in projects with a total value of $3.2 billion and a generating capacity of 1.6GW. These projects, when operating at capacity, would abate some three million tonnes of CO2-e annually, or 58 million tonnes over their operating lifetime.
At 30 June 2019, the CEFC wind portfolio (excluding fully repaid investments) included seven debt-financed wind farms. Together these represent some $740 million of CEFC investment commitments, in projects with a total value of $2.3 billion and a generating capacity of 1.1GW. These projects, when operating at capacity, would abate some 2.9 million tonnes of CO2-e annually, or nearly 62 million tonnes over their operating lifetime.