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Help Australians improve energy efficiency at home and work Will reward fArmers, forest groWers and lAndHolders that take steps to reduce carbon pollution and help protect Australiasbiodiversity
Commonwealth of Australia 2011 ISBN 978-0-642-74721-1 Ownership of intellectual property rights in this publication Unless otherwise noted, copyright (and any other intellectual property rights, if any) in this publication is owned by the Commonwealth of Australia (referred to below as the Commonwealth). Creative Commons licence With the exception of the Coat of Arms, the Clean Energy Future logo and all photos and graphics, this publication is licensed under a Creative Commons Attribution 3.0 Australia Licence.
Creative Commons Attribution 3.0 Australia Licence is a standard form license agreement that allows you to copy, distribute, transmit and adapt this publication provided that you attribute the work. A summary of the licence terms is available from http://creativecommons.org/licenses/by/3.0/au/deed.en. The full licence terms are available from http://creativecommons.org/licenses/by/3.0/au/legalcode. The Commonwealths preference is that you attribute this publication (and any material sourced from it) using the following wording:
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Contents
Overview Financing clean technologies ... will support the transformation of our energy sector Creating and deploying clean energy ... from renewable resources Helping communities and regions ... become more energy efcient Boosting support for farmers and landholders ... to improve productivity, sustainability and resilience Supporting skills in land management ... and unlocking the benets of biodiversity Helping business ... move to a clean energy future Improving our energy efciency Helping small business Helping households save energy On the move to more efcient transport 2 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19
Overview
The Government has developed a comprehensive plan to move to a clean energy future. The plan will cut pollution and drive investment in new clean energy sources, such as solar, gas and wind. This transformation is vital if Australia is to meet the environmental and economic challenges of competing in a low-pollution world. The Governments plan includes: introducing a carbon price promoting innovation and investment in renewable energy encouraging energy efciency creating opportunities in the land sector to cut pollution. The countries that develop the technologies and products that allow the world to decouple production from pollution will prosper in the 21st century. The carbon price is fundamental to transforming the Australian economy, in order to allow us to grow industries and jobs with less pollution. The Government will complement this market signal with targeted investments to bring forward new technologies at as low a cost as possible. For those investing in emerging technologies there are knowledge spillovers. This means that investments in emerging technologies will be lower than desirable because investors cannot capture the full benet of their investment to the community. By researching and trialling new ideas, the whole country learns more about our clean energy future. The Government is establishing the Australian Renewable Energy Agency (ARENA) to more effectively coordinate support for renewable energy research and development. Technologies that are more developed can still face a range of obstacles in attracting nancing. Large scale renewable energy projects often have large up-front costs. Financial institutions may treat these new technologies with caution as they do not have the information required to properly assess the risk of investing in them.
The Government is establishing a commercially oriented Clean Energy Finance Corporation (CEFC) to boost private sector investment in renewable energy and clean energy projects. These initiatives will work together with the Governments Renewable Energy Target (RET) and complement the carbon price. The Governments plan for a clean energy future represents a historic move to increase Australias investment in clean technologies, in particular renewable and clean energy technologies and generation. Energy efciency measures allow households, businesses and communities to lower energy costs while at the same time contributing to cutting carbon pollution. The plan includes a number of new measures that will create jobs and allow all Australians to benet from improved energy efciency. Current barriers to cutting pollution in the land sector limit farmers and landholders ability to contribute to and benet from tackling climate change. Around $1 billion will be spent over the next four years to overcome barriers to participation, reward emissions reductions and recognise important biodiversity co-benets. This document highlights the most signicant measures that will complement the carbon price and help transform the Australian economy.
Clean energy Australia: Investing in the clean energy sources of the future
Mechanisms overseas
Other nations are embracing o a o the oppor tunities to transiition e h to a clean energy future. The e m Conservative United Kingdom (UK) e s o Government has committed to establishing a Green Investment a n n d s Bank to address barriers which are n n constraining the ow of nance to e c clean technologies. The bank will open in April 2012, h n making the UK the rst country K s n n in the world to create a bank exclusively dedicated to green v o e n m . investments. There willl be an n n m m initial Government commitment of 3 billion (A$4.5 billlion) n a o s anticipated to mobilise 15 billion in private investment by 2014-15. n t s n 0 The United States Department of h e m f Energy Loan Programs Of ce has e a f s m 5 committed nearly $US35 billion 3 o p (A$32.7 billion) to support e 37 clean energy projects.
The Government will invest $10 billion in a new commercially oriented Clean Energy Finance Corporation (CFEC). The CEFC will leverage private sector nancing for renewable energy and clean technology projects, investments critical to the transformation of the Australian economy. It will identify projects and remove barriers that would otherwise prevent the nancing of large scale renewable energy projects. The necessary transformation of our energy sector will require the investment of $100 billion in renewable energy over the period to 2050. Additional investments will be required in energy efciency and in new manufacturing technologies. The Government can play an important role in facilitating and coordinating investment in technologies that nancial institutions may not be familiar with. Accordingly, the Government will invest $10 billion in the CEFC, with its mandate including: the commercialisation and deployment of renewable energy and enabling technologies the commercialisation and deployment of energy efciency and low emissions technologies the transformation of existing manufacturing businesses to re-focus on making the inputs for these sectors. The CEFC will play a vital role in unlocking signicant new private investment into clean energy projects and the supply chain that feeds into these projects. It will be independent from Government and be run by a Board of experts in banking, investment management and clean energy and low emissions technologies. Investment decisions will be based on rigorous case-by-case analysis of candidate projects at arms length from Government. The fund once mature is expected to be self sustaining.
Next steps
The Prime Minister will appoint a Chair of the CEFC who will report back to the Government by early 2012 on a detailed investment mandate for the CEFC, risk management policies and governance arrangements.
Clean energy Australia: Investing in the clean energy sources of the future
The Australian Government is funding around $3.2 billion in renewable energy investment to promote the research and development of renewable energy technologies to fast-track our clean energy future. These programs will be managed by a new, independent statutory body the Australian Renewable Energy Agency (ARENA). ARENA presents a unique opportunity to adopt a holistic approach to supporting the research, development, commercialisation and demonstration of renewable energy technologies through grants and nancing assistance. ARENA will also receive future funding from: dividends paid by the Clean Energy Finance Corporation (CEFC) future carbon price revenue should the Jobs and Competitiveness Program be modied following Productivity Commission reviews. It will complement the CEFC which targets the nancial barriers to large scale commercialisation and deployment of renewable energy technologies. ARENAs board will include members with experience in the technology streams that are likely to be considered. The board will also include expertise in commercialisation generally, and business experience specically. Roughly equal representation between technology skills and commercialisation and business experience will provide balanced recommendations in terms of project viability and the technology t.
Solar
The Government is bringing forward a new era in large-scale solar generation. The Government recently announced that $464 million has been awarded to Solar Dawn, a solar thermal power station to be built in Chinchilla in Queensland and $307 million has been awarded to the photovoltaic Moree Solar Farm in New South Wales. These two power stations are expected to be in operation from 2015, and will be two of the largest installations in the world, supplying enough electricity for 115,000 Australian homes per year.
Clean energy Australia: Investing in the clean energy sources of the future
The Low Carbon Communities program helps communities and councils improve energy efciency. Funding for the program will be increased from $80 million to $330 million. The program will be expanded to include two new initiatives aimed at improving the energy efciency of low income households. The Low Income Energy Efciency program will provide grants to pilot approaches that assist low income households to reduce their energy costs. The second initiative will fund a new Household Energy and Financial Sustainability Scheme to support low income households to improve their energy and nancial sustainability. Grants will also be available for local councils and community organisations to retrot or upgrade community-use facilities. This will cut their energy costs and serve as demonstration projects to promote energy efciency in the community.
Clean energy Australia: Investing in the clean energy sources of the future
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Conservation Tillage
The Carbon Farming Futures o t m program will include speciic o a suppor t for conservation tillage p e equipment. This will be delivered e e a by a 15 per cent refundable tax s offset for eliigible equiipment. n m Thiis will incentivise farmers to move to zero till and miniimum o a s h tilllage farming techniques which can enhance soil carbon, water a h o retention and produc tivity. e o d c Farmers will be required to r r participate in research and p methodology development to o g m assist efforts to settle methods s o for crediting soil carbon under d o d the Carbon Farming Initiative. r v
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The Carbon Farming Initiative will increase demand for carbon services and provide new career opportunities in rural and regional Australia. A new nationally accredited qualication will be developed for carbon service providers (such as carbon brokers and aggregators), who will connect farmers and landholders to the carbon market. This initiative will support high standards in an important and emerging industry. The Carbon Farming Skills program will ensure that there are people in regional Australia with the necessary skills to support implementation of the Carbon Farming Initiative. It will further drive the development of the carbon jobs sector by setting up a training and accreditation system, boosting rural and regional employment. Information and training workshops will be provided for farm extension ofcers, catchment management authorities, agronomists and other rural service providers. This will ensure that landholders have access to credible, high quality advice about carbon farming opportunities.
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Helping business
The carbon price will provide strong incentives for businesses to improve their energy efciency. Improving energy efciency will be one of the main ways many businesses will be able to manage the impact of a carbon price. The Government will help businesses in this process through a range of measures. These include the Jobs and Competiveness Program, which will provide $9.2 billion over the rst three years of the carbon price mechanism, and the $1.2 billion Clean Technology Program. In addition, the Government is providing support for industry associations and non- government organisations to deliver tailored information to small businesses and community organisations to manage carbon price impacts.
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the $1 billion Tax Breaks for Green Buildings program $100 million in seed funding for Low Carbon Australia to nance innovative approaches to nancing energy efciency improvements for businesses mandatory minimum energy performance standards for a range of household and commercial appliances and equipment, including fridges, washing machines, televisions, lighting and electric motors the National Building Framework which works with the building and construction industry to set out a pathway to improve the efciency of Australias building stock over time. The Government will build on this body of energy efciency measures with its response to the Prime Ministers Task Group on Energy Efciency. Two of the key responses are:
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45 40 35 30 25 20 15 10 5 0 Transport Appliances Water heating Space heating Waste Lighting Standby power Space cooling Cooking
public transport domestic flights private vehicles
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