CEFC Receives $2 Billion for Wind and Solar Expansion in Australia
The Clean Energy Finance Corporation (CEFC) in Australia is set to receive an additional $2 billion to facilitate the swift development of large-scale wind and solar initiatives. This funding aims to assist the federal government in achieving its renewable energy targets for 2030 and 2035, as well as its long-term goal of reaching approximately 97 per cent renewable energy by 2050.
This funding boost was announced by the Labor government on Thursday as part of its broader strategy to reduce emissions by 62 to 70 per cent by 2035. Alongside this, a new net zero fund has been allocated $5 billion.
Addressing Financial Challenges
The new mandate and funding for the CEFC are intended to alleviate the financial hurdles that have hindered the progress of wind projects, which have yet to secure financial closure in 2025, alongside insufficient solar project developments. The government’s report states, “The Government will update the CEFC’s investment mandate to include a new focus on the rapid rollout of renewable projects to drive down electricity prices, and commit up to $2 billion more to the CEFC General Account, to be drawn down in line with these changes.”
This initiative is expected to attract private capital for projects aimed at modernising the electricity system and reducing emissions across various sectors. Historically, the CEFC has been instrumental in providing affordable financing for significant wind and solar projects, but its recent focus has shifted towards transmission projects, green loans, electric vehicles, and electrification.
Urgent Need for Renewable Energy
The pace of wind and solar deployment has not kept up with the necessary scale to meet the 82 per cent renewable energy target by 2030. Despite efforts to expedite the Capacity Investment Scheme auctions, which aim for 40 gigawatts of wind, solar, and storage, the government’s net zero plan indicates that at least 10 gigawatts of new renewable energy must be constructed annually until 2030, with a sustained high rate of deployment required in subsequent decades.
This is crucial not only for the main electricity grid but also for the separate Western Australian grid and off-grid installations, particularly in mining regions like the Pilbara, where companies such as Fortescue are striving for “real zero” emissions in mining by 2030.
Technological Pathways and Challenges
Both the Climate Change Authority and the federal government’s report highlight that Australia possesses the necessary technologies to achieve significant emissions reductions, although challenges persist in the rollout. The government report states, “By shifting from coal to renewables, scaling renewable supply, and improving performance of our networks and how we use electricity, Australia can decarbonise the sector and service new demand.”
It emphasises the importance of managing electricity system security as the energy transformation accelerates and coal-fired power plants are phased out. Matt Kean, chair of the Climate Change Authority, acknowledged the difficulties in achieving the revised emissions target range of 62 to 70 per cent, attributing some of the challenges to the slow rollout of renewables. He expressed confidence in overcoming these obstacles, citing the existing policy framework designed to expedite progress.
Future Energy Landscape
The net zero plan suggests that, similar to the Australian Energy Market Operator’s Integrated System Plan, coal-fired power plants are expected to be decommissioned by the mid-2030s, contingent on the timely construction of sufficient wind and solar capacity. The report also notes that long-duration energy storage technologies, such as batteries and pumped hydro, will be essential for managing daily and seasonal fluctuations in energy generation.
However, during periods of low solar and wind generation, peaking gas generators are anticipated to provide the most cost-effective backup, although gas is projected to account for only 3 per cent of total generation by 2050. This indicates that renewables, supported by storage solutions, will be responsible for the remaining 97 per cent, even as electricity demand is expected to more than double due to electrification and emerging industries like data centres.
The Clean Energy Council has stated that the new emissions target and accompanying measures will guide the next phase of Australia’s energy transformation. Interim CEO Brett Wickham remarked, “We’ve done this before, and we can do it again. Australia has more than doubled the renewables in our energy system in less than a decade, and there’s no reason we can’t go the rest of the way.” He added that each new wind farm, solar project, and large battery installation makes subsequent projects easier, highlighting the momentum building in the sector.
