Clean Energy
Australia’s strong economy and proximity to the fast developing Asian markets together with the Australian Government’s measures to address climate change mean Australia’s clean technology industries are poised for growth.
Abundant and diverse renewable energy resources
Abundant and diverse renewable energy resources, supported by world-class research and well-regulated energy markets, make Australia an attractive destination for international investment in clean energy.
- The large Australian landmass is particularly suitable for clean energy infrastructure
- 90 per cent of Australia absorbs over 1,950 KWh of sunlight per metre per year
- Australia has very significant non-volcanic geothermal resources with temperatures of around 280ºC at up to 5km underground
- Strong westerly winds, up to 10 metres per second, buffet southern Australia
- Australia’s wave energy capacity is estimated to be 170,000 MW
- Australia has expertise to assess the technology and economic feasibility of developing large scale biomass resources to support future bio-commodities industries, such as alternative transport fuels
- Australia has world-class R&D expertise, and advanced science and technology for biological, chemical and mechanical testing.
Australia is also a world leader in water reform and water management, generating new technologies with commercial applications in both domestic and export markets.
The Australian Government’s plan
The Australian Government is implementing a comprehensive plan to move to a clean energy future. (Source: References for Australian Government programs: www.cleanenergyfuture.gov.au). The plan aims to cut pollution and drive investment in new clean energy sources, such as solar, gas and wind. This transformation is creating significant opportunities for international investors.
The Government’s plan includes introducing a carbon price; promoting innovation and investment in renewable energy; encouraging energy efficiency and creating opportunities in the land sector to cut pollution.
Australia’s existing Renewable Energy Target of 20 per cent by 2020, combined with other elements of the plan including the carbon price, will deliver about A$20 billion of investment in renewable energy by 2020.
Carbon Pricing Mechanism
- The Government’s Clean Energy Legislative Package is now law. It sets out the way Australia will introduce a carbon price. Australia’s carbon pricing mechanism will start with a fixed price on carbon and will then transition to an emissions trading scheme. From 1 July 2012, a fixed carbon price will operate for three years, starting at A$23 per tonne and rising by 2.5 per cent real p.a. From 1 July 2015, the carbon price will be set by the market.
- International linking to credible international carbon markets and emissions trading schemes will start from the commencement of the flexible price period. An interim link between Australia and the European Union emissions trading systems will operate from 1 July 2015 until a full link is established (no later than 1 July 2018).
- Under its Jobs and Competitiveness Program the Government will initially allocate, free of charge, Australian carbon permits to the most emissions-intensive and trade-exposed industries. More information is available at www.climatechange.gov.au.
Clean Energy Finance Corporation
- The Government is establishing the Clean Energy Finance Corporation (CEFC), which will invest in the commercialisation and deployment of renewable energy, energy efficiency and low-pollution technologies. It will also invest in manufacturing businesses that provide inputs for these sectors. CEFC will invest A$10 billion over five years from 2013-14.
- CEFC’s investments will be divided into two streams. The renewable energy stream will invest in renewable technologies, which may include geothermal and wave energy and large scale solar power generation. The clean energy stream will invest more broadly; for example, in low-emissions cogeneration technology, but will still be able to invest in renewable energy.
- A variety of funding tools will be used to support projects, including loans on commercial or concessional terms and equity investments. An independent board will have responsibility for setting the investment strategy and managing the CEFC’s investments consistent with an investment mandate set by the Government.
- An expert review panel to advise the Government on the design of the CEFC reported its’ recommendations to the Government in March 2012. See www.cefcexpertreview.gov.au.
- In August 2012 the Government appointed Ms Jillian Broadbent AO as the chair of the Clean Energy Finance Corporation (CEFC) Board for a five-year term and announced the appointments of Mr Michael Carapiet, Mr Ian Moore, Ms Anna Skarbek and Mr Andrew Stock as members of the CEFC Board each for a five-year term.
Australian Renewable Energy Agency
- A new Australian Renewable Energy Agency (ARENA), administering A$3.2 billion in Government support for research and development (R&D), demonstration and commercialisation of renewable energy commenced operations on 1 July 2012.
- ARENA will incorporate initiatives previously administered through a range of bodies, including the Australian Centre for Renewable Energy (ACRE), the Australian Solar Institute (ASI) and the Department of Resources, Energy and Tourism.
- Around A$1.7 billion in uncommitted funding from the range of consolidated programs will be available for the ARENA board to invest in new renewable energy projects – including projects that potentially involve renewable energy-related transmission infrastructure investments – between now and 2020.
- Legislation establishing ARENA as an independent statutory authority was made into law on 4 December 2011.
Clean Technology Programs
- The Clean Technology Investment Programs will provide grants of up to A$1 billion over seven years, for firms to invest in energy-efficient capital equipment and low-pollution technologies, processes and products. The program opened for applications on 16 February 2012. See www.ausindustry.gov.au.
- The Clean Technology Innovation Program will provide A$200 million over five years to support R&D and commercialisation of clean technology products, processes and services.
- The Community Energy Efficiency Program will provide A$200 million to assist local government, not-for-profit and community organisations to undertake energy efficiency upgrades to community infrastructure.
Carbon Farming Initiative
- The Carbon Farming Initiative (CFI) is a carbon offsets scheme that will provide new economic opportunities for farmers, forest growers and landholders and help the environment by reducing carbon pollution.
- Credits generated under the CFI that are recognised for Australia’s obligations under the Kyoto Protocol will be able to be sold to companies with liabilities under the Carbon Pricing Mechanism.
Energy Security Fund
- A $A5.5 billion Energy Security Fund is being established to smooth the transition to clean energy and maintain energy security. There will be scope for payments for the closure of around 2000 megawatts (MW) of very highly emissions-intensive coal-fired generation capacity by 2020 and there will be transitional assistance to highly emissions-intensive coal-fired power stations.
Encouraging Energy Efficiency
- Australia’s Energy Efficiency Opportunities scheme which requires large users to identify, evaluate and publicly report on cost effective energy savings opportunities through their Boards applies to more users, including the energy sector, from 1 July 2012.
- Australia’s Commercial Building Disclosure program requires large commercial office buildings to advertise energy efficiency ratings to potential buyers or lessees (from 1 November 2010).
- Low Carbon Australia’s Energy Efficiency Program (A$87.6 million) provides co-investment finance and advice to businesses ready to invest in energy efficiency upgrades for existing commercial buildings and industry.
Further information about Australia’s Clean Energy & Environment capability, including Austrade’s Clean Energy & Environment Export Directory, is accessible here.
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