The Australian Government is establishing a $1 billion Clean Energy Innovation Fund. It will provide $100 million each year over ten years to support emerging technologies making the leap from demonstration to commercial deployment.
It is not going to be through new money, though. Instead the $1 billion investment will be syphoned off from the $10 billion allocated to the Clean Energy Finance Corporation (CEFC).
The new fund will be jointly managed by the CEFC and the Australian Renewable Energy Agency (ARENA), and will provide both debt and equity for clean energy projects.
With this new initiative the Government attempts to plug an investment gap it says is holding back early stage clean energy projects in reaching the size and maturity needed to attract private equity.
The new Clean Energy Innovation Fund will target projects such as large-scale solar with storage, off-shore energy, biofuels and smart grids.
The Government says that the CEFC and ARENA will be strengthened and invigorated. This would be a significant shift from the previous Abbott administration, which unsuccessfully tried to abolish the agencies.
ARENA will continue to manage its existing portfolio of grants and deliver the announced $100 million large-scale solar round. It will also be given an expanded focus beyond renewable energy to enable energy efficiency and low emissions technology.
According to the Government, this will provide greater alignment with the CEFC and ensure that ARENA is able to support the full spectrum of emerging clean energy technology options.
Once the $100 million large-scale solar round is complete, ARENA will move from a grant based role to predominantly a debt and equity basis under the Clean Energy Innovation Fund.
These changes are to work hand in hand with the Emissions Reduction Fund, the Renewable Energy Target, and the National Energy Productivity Plan.