We see a common thread in this activity: a focus on embracing technological innovation to cut energy costs, lower emissions and plan for the long term.
Much has changed since the CEFC began investing in 2013. From our early days largely focusing on renewable energy opportunities, we now see our capital working right across the economy, in an increasingly diverse range of projects.
We see clean energy technologies embraced by home owners and small businesses; essential infrastructure projects and landmark property developments; innovative start-ups and institutional investors with an eye to a sustainable future.
In 2017-18, our most active year of investment, we see a common thread in this activity: a focus on embracing technological innovation to cut energy costs and lower emissions.
As an investor on behalf of Australian taxpayers, we are proud to be part of this exciting economic transition. CEFC capital has played a key role in a $19 billion uplift in clean energy investments in Australia in just five years, with every dollar of CEFC investment matched by $1.80 from other investors. This is made possible with the vital contribution of our co-investors, project developers and others as the CEFC works to deliver on our mission to catalyse additional finance into the clean energy sector.
IMPACT AND INNOVATION
Our strategy is focused around the key themes of impact, innovation and organisational effectiveness. In addressing financing gaps in the clean energy sector, we constantly adapt our offering to meet the needs of this dynamic market. Within a robust governance framework we invest across a wide range of clean energy subsectors and asset classes:
- 2017-18 was a record year for renewable energy investment in Australia as the cost of renewables continued to decline and proponents raced to build out the 2020 Renewable Energy Target. We financed 10 large-scale solar projects and four wind farms in 2017-18, including projects underpinned by power purchase agreements as large-scale energy consumers reduced their exposure to high power prices.
- Australia now has a firmly established ecosystem of local and international project developers, engineers, equipment suppliers, advisers, consultants and financial institutions, generating income and jobs for the Australian community.
- Integrating variable renewables requires significant investment in balancing technologies such as pumped hydro, storage, transmission and demand response. We have financed four large-scale renewables-plus-storage projects, as well as the world’s first fully-integrated wind, solar and battery project.
- Energy efficiency performance is mixed across the economy: while office and commercial buildings increasingly target ambitious standards, residential energy efficiency is improving very slowly, and there is a long way to go in industrial energy use. We invest in market leading projects and investment funds to demonstrate how energy efficiency can reduce emissions and deliver high quality buildings, processes, infrastructure, products and services.
- Electrifying transport is an important way to tackle growing transport emissions and Australia is still to embrace the market in a meaningful manner. The CEFC particularly focuses on accelerating the uptake of electric vehicles and new charging infrastructure.
- Agriculture emissions are projected to grow as Australia's population grows and we export food and fibre to our region and beyond. We invest in energy efficient agriculture to cut methane emissions.
- The waste sector also presents an opportunity. By recovering energy from urban and industrial waste and cutting the amount of waste that goes into landfill, we can reduce emissions and provide firm generation capacity.
- Clean energy is an emerging focus for Australian innovators, and our venture capital-focused Innovation Fund is helping accelerate the commercialisation of exciting low carbon technologies.
A RECORD OF STRONG GOVERNANCE
None of the CEFC’s achievements would be possible without our highly skilled and experienced team. We ask our people to bring their commercial expertise and market knowledge to the transformation of clean energy markets and I recognise their tremendous contributions. I also recognise the efforts of our departing Chief Governance and Strategy Officer Kevin Holmes and Chief Investment Risk Officer Stephen Panizza.
We bid farewell to our founding Board members and chair, Jillian Broadbent AO during 2017-18 and welcomed our new chair Steven Skala AO, and new Board members. The fresh perspectives of our Board continue the CEFC’s record of strong governance.
We appreciate the effective working relationships with Minister for the Environment and Energy the Hon Josh Frydenberg MP and the Minister for Finance Senator the Hon Mathias Cormann. We thank Minister Frydenberg for his support and look forward to working with Energy Minister Angus Taylor and Environment Minister Melissa Price in their new roles.
We also appreciate the continued interest in our activities from many members of the Australian parliament, as well as state and territory parliaments and agencies.
On behalf of the CEFC, I acknowledge the exceptional leadership of Ivor Frischknecht, ARENA’s founding chief executive, and welcome his successor Darren Miller. We are excited by the continued role of our two organisations at the heart of Australia’s innovative clean energy ecosystem.
SHARPENED FOCUS ON EMISSIONS
In the year ahead, we will sharpen our focus on the emissions impact of our investments – from the direct carbon reductions of projects we finance, to the indirect demonstration benefits of the projects and companies we invest in, and our increasing focus on biocarbon.
While the pace of the clean energy transition varies from year to year, our investment pipeline is robust. We look forward to expanding our work alongside market leading businesses, entrepreneurs and developers for the benefit of the Australian community.
Chief Executive Officer