Australia’s federal government has handed an extra A$1 billion ($687 million; €618 million) to the Clean Energy Finance Corporation for investment in transmission upgrades and energy storage projects.
The government has established a A$1 billion Grid Reliability Fund that will be administered by CEFC. It’s the first new capital for the agency since it was established in 2012 with a remit to invest A$7 billion in energy-efficiency schemes across industries.
The new fund will prioritise investments in jurisdictions where state and territory governments are working with the federal government towards an agreed electricity reliability goal to ensure sufficient reliable generation capacity is available to meet periods of high demand, according to a government statement.
Eligible investments for the cash will include energy storage projects, such as pumped hydro and batteries, transmission and distribution infrastructure, and grid stabilising technologies.
Angus Taylor, minister for energy and emissions reduction, said in a statement: “It is no secret that the National Electricity Market is under pressure – this fund is designed to tackle that and is part of a suite of initiatives that the government is delivering to ensure when people flick the switch, the lights come on and stay on.”
Prime minister Scott Morrison added that the funding would also help unlock private investment in projects that would boost grid resilience and help lower energy prices.
The federal government announced earlier this week that it would join with the New South Wales state government to underwrite up to A$102 million to help fund an upgrade to the interconnector between New South Wales and Queensland (QNI) ahead of the final regulatory determination on the project from the Australian Energy Regulator.
The underwriting of the QNI upgrade will not come from the new Grid Reliability Fund, a spokesman for the Department of the Environment and Energy confirmed to Infrastructure Investor.
The QNI upgrade has been declared a high-priority project under the Australian Energy Market Operator’s Integrated System Plan, meaning that the upgrades will be brought forward to late 2021. There are also plans to upgrade the interconnector between NSW and Victoria.
Both interconnectors are in the transmission network operated by Transgrid, the transmission company that was privatised by the NSW government in 2015 for A$10.3 billion. The network was leased to a consortium comprising Canadian pension CDPQ, infrastructure fund Utilities Trust of Australia, Tawreed Investments, Wren House Infrastructure and ASX-listed Spark Infrastructure.
A report from the Australian National University published last week found that Australia is on track to meet its emissions reduction targets under the Paris Agreement should renewable energy deployment continue at the current rate.
Continued deployment at the current rate, though, will require governments, particularly the federal government, to facilitate construction of adequate electricity transmission and storage, the report said, otherwise emissions could rise again in the 2020s.