The new $10 billion Clean Energy Finance Corporation will help under-resourced green start-ups catch up with their overseas counterparts, according to industry figures.
The government says the new fund, created as part of the carbon pricing plan, will invest in businesses “seeking funds to get innovative clean energy proposals and technologies off the ground”. It will also help existing manufacturers to re-focus their activities towards renewable energy.
A further $3.2 billion has been earmarked for start-ups pioneering new renewable energy ideas under the Australian Renewable Energy Agency and the Clean Technology Innovation Program will provide $200 million in grants to support business investment in green technology and energy efficiency.
Kane Thornton, strategy director at the Clean Energy Council, welcomed the new fund, saying it will help renewable start-ups “get on the right road” to growing their businesses.
“The challenge is for businesses that have been through the research and development phase and need money to scale up,” he says. “They have a certain level of risk and they are capital intensive. Hopefully this financial corporation will help them.
“We know of plenty of geothermal and wave companies that are at that stage and are facing big challenges in getting capital.
“There is a whole range of technology coming through, from power storage to fuel cell technology.
“No one really knows which one will succeed but one challenge has been uncertainty and this framework provides clarity.
“We’ve got a lot of natural advantages in this country in terms of wave and geothermal resources but there’s no doubt that we have a lot to do to catch up with the rest of the world.”
Tim Buckley, managing director of Arkx, which manages clean energy investment funds, says the carbon price plan will encourage investors to put money into the sector.
“This is an emerging industry that needs a lot of capital to be mobilised and the thing holding that back has been the lack of a clear framework,” he says.
“I expect there will be a substantial step-up in green energy activity. There are plenty of start-ups (in Australia) but also plenty of failures due to a lack of follow-through.
“There is increased certainty for investors but there is still a long way to go to bed this in and make sure the Liberals don’t undermine it. We haven’t got the legislation yet.”