Investors warm to new Australian gov’s renewables policies

Investors and asset managers at last week’s Australian Clean Energy Summit said the country’s new Labor government would help boost the flow of private capital into the renewables sector

The summit, hosted by the Clean Energy Council, took place ahead of the newly elected Labor government introducing a bill to Parliament this week to legislate a requirement that Australia reduce emissions by 43 percent by 2030, an increase on the previous Coalition government’s pledge to reduce emissions by 26-28 percent by 2030.

Speaking at the conference, QIC global infrastructure partner Angela Karl said legislating the government’s pledge to increase the national emissions reduction target would help provide much-needed certainty for investors looking to invest in the country’s renewables space.

Karl noted that, in the lead up to the federal election in May, investors the firm had engaged with – including most of Australia’s largest superannuation funds and several offshore sovereign wealth funds – had highlighted greater policy certainty as most crucial to potential investment in Australian renewables.

Flagging the country’s outdated electricity transmission system as another major hurdle for investors, she said: “Everyone around the world knows that we don’t have a grid, we’ve got a piece of spaghetti. We’ve got to build out a grid [and we need to do] that in an effective manner but also not delay it [while] trying to achieve perfection [in the process].”

Citing the government’s 43 percent emissions reduction target and its promise to “rewire the nation” by investing A$20 billion ($13.84 billion; €13.65 billion) in modernising the grid as big steps forward, she said another key factor in attracting more investment towards Australia’s clean energy sector was the scale of the new government’s ambition. Onshoring most of the country’s renewables supply chain and harnessing Australia’s “enormous” export potential would play an important role in Australia becoming a clean energy superpower, she added.

“What I hope to see in this term of government is a lot more ambition around where Australia could go,” she said.

Also speaking at the summit, Palisade Investment Partners chief operating officer Karen Gould said investors would benefit from the “very welcome” A$20 billion set aside to upgrade the country’s grid being put towards de-risking transmission projects.

“What’s critical is that [the rewiring the nation] funding facilitates and sits alongside private capital [and] crowds it in rather than crowding it out,” Gould said. “One of the options for that funding may be that it’s used to de-risk transmission projects to make them more investable to the plethora of private infrastructure capital available.”

“Underwriting early works or development activity [would] hopefully not just unlock the capital but also help [accelerate] these projects and get them built quickly.”