The Clean Energy Finance Corporation has signalled its intention to provide financial backing to battery storage projects completed as part of South Australia’s $550 million energy plan, according to a statement from the agency released today.
As part of the South Australian Energy Plan, up to $150 million will be provided by the state government in support of construction of Australia’s largest battery storage facility. Funding, provided via a newly established Renewable Technology Fund, will be split evenly between the provision of grant funding, and entering into debt agreements with projects. This ensures the state government is able to recoup about half of the funds.
With the involvement of the Clean Energy Finance Corporation (CEFC), potential projects would have access to an additional source of finance, eager to support clean energy technologies at a scale that has yet to be seen in Australia.
It is a discussion that has progressed with a haste that has not been seen in Australian energy circles for almost a decade. With the backing of the South Australian Government, and now the Federal Government via the CEFC, a utility scale battery storage system could be established in South Australia before the end of the year.
It’s a clear testament to the power of stable and proactive policies in driving on-the-ground change in our energy sector.
“We welcome the opportunity to work with the South Australian Government on this exciting initiative. This project will efficiently demonstrate how battery storage can play a part in the competitive future of our energy system.” CEFC CEO Oliver Yates said.
In indicating its willingness to support South Australia’s battery storage initiative, the CEFC has entered an increasingly politicised environment around energy policy. This has so far culminated in a face-to-face confrontation between the South Australian Premier Jay Weatherill and the Federal Energy Minister Josh Frydenberg over who is taking appropriate action to address Australia’s energy challenges.
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With the CEFC existing as a Federal agency, and reporting to Minister Frydenberg, the South Australian Government will likely chalk up the CEFC’s willingness to support battery storage in the state as a symbolic win.
The South Australian Government has already moved to request expressions of interest for the battery storage projects, providing a 2-week window for companies to make their pitch.
Potential providers Tesla, whose CEO Elon Musk sparked the initial conversation about the potential for battery storage in South Australia via twitter, and Australian based battery company Zen Energy lead by esteemed economist Ross Garnaut.
@mcannonbrookes Tesla will get the system installed and working 100 days from contract signature or it is free. That serious enough for you?
— Elon Musk (@elonmusk) March 10, 2017
As has been prior practise, the CEFC will seek to provide investments in projects in partnership with other private and public investors. The CEFC has had a long stated aim of leveraging its investments to bring additional private investors to the table, while targeting support for innovative clean energy technologies.
“As South Australia is the leading state of renewable generation, it is set to become the leading state for the adoption of these new solutions.” Mr Yates added.
“The CEFC has considerable expertise in the area of large-scale storage and flexible financing solutions. We are confident we can work with speed to contribute to a successful outcome in South Australia. We are also confident we can create a model that can be used in other states as they seek to integrate growing renewable energy capacity into a cleaner, cheaper and reliable energy system.”