Green bank turns to small solar hybrids and battery retrofits in new $100 million package as mega projects stall

Australia’s green bank, the Clean Energy Finance Corporation, has announced a new $100 million financing package to fund the rollout of 16 small-scale solar battery hybrid projects, including some battery retrofits and standalone project.

The money – in the form of concession finance – will be funnelled through Canberra-based Infradebt and is deliberately targeted at projects of around 5 megawatts (MW) that can be speedily built and connected to the grid.

The federal government is struggling to gain traction in its flagship Capacity Investment Scheme as projects battle against planning, social licence, and grid connection issues, and the lack of corporate buyers that can offer the firm contracts needed to secure bank finance and equity.

Federal energy minister Chris Bowen says the Distribution Connected Accelerator Program is looking to fill the gap between rooftop solar and large-scale renewable developments, and will focus on distributed networks that allow more renewable energy to connect faster and at lower cost.

“Australians know about rooftop solar, and they know about big solar and wind farms. This investment backs the missing middle — projects that can be built faster, connect to local networks and help deliver cheaper, cleaner electricity.”

“These projects make better use of the poles and wires we’ve already got, helping bring more renewable energy online without waiting for every major transmission project to be completed,” Bowen said in a statement.

“Projects of this size are typically large enough to power local communities and businesses while being small enough to connect to existing parts of the electricity network, helping them be delivered sooner.”

The government says projects of this size are typically large enough to power local communities, but often struggle to secure finance because traditional project finance is often geared towards larger developments.

Infradebt, which has financed more than 40 distribution-connected renewable projects over the pas 13 years, will  select applicants through a competitive process. It is looking at projects that can commence construction in 2027 and be fully operational by early 2029.

“Australia’s energy transition will not be delivered through a handful of mega-projects alone,” Alexander Austin, CEO of InfraDebt, said in a statement.

“Smaller, distribution-connected projects have a critical role to play because they can often move from development to operation significantly faster.”

Austin told RenewEconomy that small projects can get through planning assessments in a fraction of the time, and grid connections can be solved at a fraction of the cost.

However, one of the big barriers to such projects was the inability to attract major off-takers, often because there were simply too small for the big players to take notice.

“We’re hoping this program will mobilise capital in the space,” he told Renew Economy. “There are lots and lots of projects out there, so it’s about finding the right ones that are ready to go now.

“We see this as complimentary to the CIS, not adding to the congestion. We are targeting things that can get done and get done quickly.”

Infradebt and the CEFC are targeting about 5 or 6 distribution-connected solar-battery hybrid projects , and about 7 to standalone or retrofit battery projects.

Monique Miller, the chief investment officer – Renewables and Sustainable Finance – at the CEFC, said smaller, ready-to-connect projects can face barriers due to size and transaction costs.

“By providing targeted capital and certainty and efficiency of process, CEFC finance is helping to unlock a constrained segment of the market while supporting a more resilient energy system and utilising latent capacity in distribution networks,” she said.

An industry briefing on the program is scheduled for mid-August.

If you would like to join more than 29,000 others and get the latest clean energy news delivered straight to your inbox, for free, you can click here to subscribe to our free daily newsletter.