Fueling Clean Energy Investment in Australia
Climate change presents a diverse range of crucial challenges, often existential in nature, for people and places around the world. Increasingly, early-stage businesses and innovators are turning their attention to solving or managing these fundamental global problems.
According to 2014 data from the OECD, Australia had the highest level of greenhouse gas emissions per capita among OECD nations (22,240 kilograms per capita); among the highest in the world.
Although our total contribution to global emissions pales in comparison to that of China, the US or the EU-28 (regularly cited as the highest polluters), our role in responding to global warming and climate change is an important one. Even relatively small polluters can demonstrate leadership, work together with larger ones to achieve better outcomes and benefit from the transformation of their energy mixes.
For example, according to Sweden.se, Sweden’s energy mix included 50% from renewable sources back in 2012. In 2015, Denmark claimed to have produced enough wind power to meet a world-record 42% of its electricity consumption. Both countries rank well below Australia in the OECD data of emissions per capita. Despite Scandinavia’s success and leadership, according to ABS data from 2014-15, Australia generated just 12% of its electricity from renewable sources (5% hydro and 4% wind). A whopping 88% came from coal, natural gas and petroleum products. Clearly we have more to do as a nation.
Major polluters have also been making policy shifts and investments in clean tech to facilitate positive change. Bloomberg reported late last year that China would halt new coal mine approvals for 3 years and close down 1,000 existing mines. Last year, China had more wind power capacity than any other nation – followed closely by the EU and then the US.
In terms of policy and investment, Australia has been making improvements. In March, the Australian Government announced a $1 billion Clean Energy Innovation Fund to support emerging technologies. It is jointly managed by the Clean Energy Finance Corporation and the Australian Renewable Energy Agency. The fund will focus on large-scale solar projects and storage, off-shore energy, biofuels and smart grids.
Australia’s target remains to reduce emissions by 26%-28% by 2030.
Like the Australian Government, we believe that emerging Australian technologies can play a key role in supporting international responses to the impacts and causes of a changing climate. Although our total contribution to anthropogenic climate change may be relatively small, our leadership can influence policy-making in other nations and our technology can be instrumental to their own counter-measures. Greater investment in clean tech means that our research institutions, scientists, innovators and entrepreneurs can more rapidly develop, commercialise and export new technology to the world.
On the 2nd of September, the Clean Energy Finance Corporation announced a $10 million cornerstone investment in Australia’s first Clean Energy Seed Fund, managed by Artesian. We will be seeking a further $10 million from high net worth, corporate, institutional and impact investors seeking diversified exposure to select clean energy startups.
The Clean Energy Seed Fund will be seeking registration as an ESVCLP, offering investors tax-free returns and compliance with the Significant Investor Visa programme.
Through our various early-stage venture capital funds, we support best-of-breed startups across a range of sectors, all with high growth potential. Our investors can expect the same level of rigor as we target scalable clean tech startups, including leveraging partnerships with key hubs of R&D activity including: accelerators, incubators, universities and more.
The Clean Energy Seed Fund will target 30-50 high growth potential startups, fuelling clean tech innovation in Australia over the next 4-5 years. It will look across sectors, including: the internet of things, energy storage, biofuels, alternative energy generation (solar, wave, geothermal, wind), metering and control, green building and biomaterials, transport technologies, water and waste.
By creating a fund that has an environmental and moral dimension as well as financial viability (including tax-exempt potential returns for investors), we aim to attract more sophisticated investors to the clean tech sector. By facilitating more interest and investment in the sector, we can strengthen Australia’s position as an international leader, role model and exporter of new technology.
In this way, Australia can contribute far more to the global solution than it ever has to the global problem. That is a legacy we would be proud to have participated in.
This post was originally posted on Artesian's blog.