Australia’s electricity system is undergoing unprecedented, rapid and transformational change.
This change is necessary to deliver new sources of generation to replace retiring, older generation assets and to reduce Australia’s emissions. However, while this transition occurs the electricity system must remain reliable and secure – for today and into the future. This requires increased investment to improve system flexibility, including through energy storage, network upgrades and demand management.
This remains an important and ongoing focus for CEFC investment activities, and is further reflected in the Ministerial amendment to the Investment Mandate in December 2018 regarding the development of a market for firming intermittent sources of renewable energy generation.
BloombergNEF has forecast that Australia will have the most decentralised power system in the world as early as 2030, with behind-the-meter sources contributing an estimated one-third of Australian energy capacity. Further work from the CSIRO and
Energy Networks Australia suggests we will need to invest more than $200 billion in the distribution and transmission network by 2050, along with more than $600 billion in centralised and on-site generation.
In 2018–19 we further increased our efforts to encourage private sector finance into new technologies where there is less appetite from mainstream investors, including behind-the-meter generation and grid solutions, as well as pumped storage and large-scale batteries.
A new specialist Clean Futures Team within the CEFC was created to deepen our focus on long-dated emerging opportunities in these areas. We have a particular focus on grid augmentation – including transmission, interconnectors and renewable energy zones – as well as hydro, grid-scale battery storage and hydrogen. This complements our ongoing activities to accelerate investment in near-term opportunities across multiple sectors of the economy, including renewable energy, energy efficiency and low emissions technologies.
The CEFC’s strong portfolio enables it strategically to seek to stimulate economic activity in areas such as energy storage and the required improvements to the grid, as well as to support early-stage developments and technologies while they build commercial traction with private investors.
Steven Skala AO