CEIG formalises its advocacy role for investors in Australian renewables

The Clean Energy Investor Group, a collection of 15 investors in Australian renewable energy assets, has appointed Simon Corbell as its new chairman.

The move is the first step in formalising the structure and operations of CEIG, which was previously an informal coalition of investors that was formed in 2019 to make collective submissions to the Australian Energy Market Commission in its deliberations over whether to change the rules around marginal loss factors.

Investors failed in their bid to have the MLF regime changed, despite expressing strong concerns over the rules in multiple submissions, and criticised the AEMC over its levels of engagement and transparency.

Corbell is the former deputy chief minister and energy minister of the Australian Capital Territory and is currently chief advisor to advisory firm Energy Estate, a role that he will continue to carry out. In addition to Corbell, CEIG has appointed Marilyne Crestias, previously a senior director in Victoria’s Treasury and energy departments, as policy and secretariat manager.

A spokeswoman for CEIG said that not all its members wanted to be named but confirmed that they include: BayWa; John Laing; Lighthouse Infrastructure; Macquarie Capital; RWE Renewables; and Windlab, the renewables company owned by Squadron Energy and Federation Asset Management. According to a statement, CEIG represents domestic
and global institutional investors with a combined Australian portfolio value of more than A$9 billion ($6.6 billion; €5.5 billion) and a total of 49 assets under management.

The group that previously made submissions to the AEMC also counted BlackRock, Foresight Group, Infrastructure Capital Group, Palisade Investment Partners, and the Powering Australia Renewables Fund among its members. PARF is a fund run by AGL Energy to which QIC has committed A$800 million on behalf of its managed client the Future Fund and investors in its Global Infrastructure Fund.

Corbell told Infrastructure Investor that he has joined as chair because the pace of change in Australia’s National Electricity Market “warrants an ongoing and permanent voice for investors”.

“Investors needs to be involved in conversations [about rule changes], and policymakers and regulators need to know what investors are thinking. Unless investor voices are heard clearly, we could end up with structural decisions being made for the NEM that don’t allow investment decisions to be made with confidence,” he said.

“Our view is we need a long-term, stable investment environment that allows the lowest cost-of-capital investment to be deployed, because that means the cheapest renewables and the cheapest electricity prices.”

The group is still in the process of formalising what its structure will be, but Corbell said he hoped that would be in place before the end of 2020.

Initial priorities

The group’s initial focus, Corbell said, would be responding to two significant reports, both published on Monday.

The first is the AEMC’s interim report on its consultation on the co-ordination of generation and transmission investment implementation, which aims to implement reforms to how investments are made in the transmission network and how generators can access the network.

That interim report recommends replacing marginal loss factor with locational marginal pricing. This would see generators shift from the current model, where they are paid a region-wide price for their energy multiplied by their static marginal loss factor, with LMPs that would see the price settled at each individual location.

The second report is the Energy Security Board’s Post 2025 Market Design Consultation Paper, which outlines a comprehensive redesign of Australia’s energy market and sets out the potential solutions through seven different working groups.

Corbell said that CEIG would actively engage with both AEMC and the ESB to ensure that investor perspectives are adequately considered in what will prove to be significant reforms to Australia’s energy network.

“In the medium term, we remain focused on structural issues that we still feel need to be addressed, including issues around MLFs and the methodologies associated with them,” he said.

“The important thing for us is that key decision-makers understand that investors have a voice that is focused on the detail and specific design of how the NEM operates, and investors want to make sure that decisions on how the NEM operates are made with regard to the investability of the NEM in the long term.”

Corbell added that he had already received interest from non-members inquiring about possible membership and said this was “very welcome”.