Here is an unedited transcript of the recent interview with Clean Energy Finance Corporation chief executive Ian Learmonth on RenewEconomy’s Energy Insiders podcast. You can listed to the full podcast here.
Giles Parkinson 00:00
Ian Learmonth is the Chief Executive of the Clean Energy Finance Corporation. Thanks for joining us once again on the Energy Insiders podcast.
Ian Learmonth 00:07
Nice to be here, Giles.
Giles Parkinson 00:10
Well, you have just completed or filed your annual report. The last annual report for 2020 has been completed and filed for the, for the year and last week you appeared in the senate estimates. We’ve got plenty of time to get into some of the achievements that you’ve done over the last year and some of the other issues that are coming up ahead of you, but the CEFCs once again in the news, isn’t it? Your predecessor has been testifying saying that very concerned about some of the proposed changes to the mandate for the CEFC. Are you finding yourself sort of under political pressure at all?
Ian Learmonth 00:50
Um, no, we don’t ,I don’t feel that’s necessarily the case Giles. I mean look, it’s a great vote of confidence from the government to give us, you know, their plan is to provide us with another billion dollars to invest in grid reliability. And that’s a fairly broad mandate. Transmission, distribution, storage, generally, anything that’s going to help improve the, you know, the state of the grid. So that’s, you know, I guess that’s what’s attracting quite a lot of media attention. And that bill, then, as you flag, had a series of open submissions from the public, and there was a Senate committee hearing, and people are, you know, focused on it to see what its all about. Does it make sense to give the CEFC additional money? What will be used for? Will it be effective? So I guess it’s understandable there’s some scrutiny, but no, we still maintain a very independent position.
Giles Parkinson 01:49
Yes. Look, I mean, the, the funding issue is probably not the question I guess. The biggest question is, what that, as you say, what that funding will be used for, and this Grid Reliability Fund is an interesting fund. Correct me if I’m wrong, but my understanding is that this is the mechanism, because it’s pretty hard to unravel, for the UNGI programme of the federal government to be rolled out through the CEFC by you signing contracts with the shortlist of projects, which is half and half gas and half and half pumped hydro. Excuse me, I get a little bit confused about that.
Ian Learmonth 02:21
And you’re not you know, you’re not alone Giles. That was interesting with the Senate estimates last week. There was lots of questions that reveal there is some confusion around this. So today, the UNGI programme is being run by the government. So the department are in fact, reviewing all the proposals, and as you said, some gas and pump storage projects and some, and how they might support those particular projects to provide dispatchable energy into the grid. Now, with the passing of the Grid Reliability Fund, which, you know, will take its usual course, there is, you know, the government’s certainly are contemplating that would give CEFC the ability to then pick up, you know, where the UNGI programme currently sits today, but, you know, we’ll still look at all those projects on their merits. And do they, are they complying investments? Do they make sense for the CEFC to put capital towards them? So today it’s being run by the department and would go on to the government’s balance sheet, but tomorrow, if the GRF, as we call it, is passed, then I guess they will direct those potential projects to us.
David Leitch 03:41
And Ian could I ask, just as you contemplate the Grid Reliability Fund, you probably didn’t get a chance to listen but we had Rick Francis, the CEO of Spark Infrastructure on this, this same podcast a couple of weeks back, and he mentioned that there wasn’t really a shortage of capital for transmission but there was a shortage of a kind of certainty of return around it, and I just wondered how you saw the Grid Reliability Fund as you look at and contemplate what you might do with it, what do you contemplate doing with the money very broadly?
Ian Learmonth 04:20
Yeah, no. I mean, just in terms of grid investment, you’re right. It’s where there’s regulated assets. So when transmission particularly finds its way into a regulated asset base, then and relatively easy enough things to finance, because you’ve got that predictable cash flow and lenders can come in and and away you go. I guess the challenge is where that’s not as straightforward, and we’re seeing a bit of that around some of the financing ideas we’ve been contemplating for renewable energy zones where there’s a build out of transmission to an identified site, and then, you know, essentially the cost of some of that infrastructure is passed on to new generators. And there’s a bit of a chicken and egg issue about who’s going to pay for the transmission first while you wait for the generators. Generators don’t want to pay before they see the, the grid. So I think outside the regulated assets, that’s where things get harder. That’s where things get tricky, I think to finance. Yeah. So that’s where we have to play a role.
David Leitch 05:30
And you could essentially take some of the, potentially, take some of the risk, essentially, of a project not eventually been regulated, in the transmission link to say, a renewable energy zone. Is that the kind of way it might…
Ian Learmonth 05:47
Yes that’s right, David. You know, I think that’s always been our approach, is to, no need to play where, you know, all the other banks are comfortable playing. Let’s kind of fill a, fill a gap in the market. And, you know, we would be prepared to take some risk, I mean, you know, it’s always a question, is it a sensible risk to take, is it a good use of taxpayers money getting the right return for it, but we are definitely considering taking those sort of risks that ,because you know, we’re keen to see renewable energy zones get up in the build out of, you know, quality renewables projects. So yes, we’re kind of considering all those sorts of risks really, as we speak.
David Leitch 06:31
And I’ll hand back to Giles, of course, but just continuing on this exact financing thing, then, at the moment of course, the transmission operators, virtually exclusively the transmission, the regulated transmission companies, whether they’re government owned, as in Queensland, or privately owned, as in New South Wales and South Australia, and mixing sort of in Victoria, is it, would you be advancing funds or, and or equity, conceptually, to those same transmission companies and just telling them to, you know, you get on with it, and and we’ll assume the risk? It’s almost the same question as before with just how it works ?
Ian Learmonth 07:09
Yeah, quite possibly. And then look, we are working with some of those, some of those players at the minute, because, you know, they have, you know, they’re kind of I guess, contested asset business, which is outside the regulated asset base, and that’s going to need capital. And that’s, that’s probably where we’re more likely to play. So, yeah I hope that we, you know, we’ve got some deals that we can announce in the not so distant future, in that regard. But yes, certainly, I mean, you know, that we’re not, we don’t tend to and haven’t historically linked to any of the state owned transmission companies, because they’re, you know, they’re normally state funded, of course.
Giles Parkinson 07:51
Just one more question on the Grid Reliability Fund, just so that I can just clarify it. So what you’re saying then, is that the government, and reflectively Angus Taylor’s office, will be continuing with the UNGI until further notice, and presumably, if the grid, the change in legislation gets through Parliament, then you will start inheriting that mandate, both the ones that may or may not have already been awarded, and haven’t really done much so far, in two years, and those that are kind of left open, is that right?
Ian Learmonth 08:19
That’s, that’s the plan Giles. So and I think, yeah, if they’ve been written on the government’s balance sheet, that’s down on the government’s balance sheet, we might help administer them. Yes. And then the new ones, we would consider them as standalone, new projects.
Giles Parkinson 08:34
How would you feel about, how do you feel about assisting sort of gas fired power stations? I mean, I know “gas is a transition field” is the mantra from the government. It hasn’t been within your bailiwick under the Clean Energy Finance Corporation up until now. You’re presumably seeing a whole bunch of new other technologies coming through like battery storage and things like that. Even gas fired power stations, even fast starting ones appear to be old technology. Does that sort of require changing mindset on your behalf?
Ian Learmonth 09:02
Yeah, look it’s an interesting one, as you say, we ever looking at increasingly new technologies and Technology Roadmap, I’m sure we’ll touch on it, is informing of, of where we’re heading. And what we, you know, we’ve obviously played a role in, in renewable gas in the past, landfill gas and so on. In terms of gas fired power stations, is there a role for the CEFC in that regard? I mean, I think that’s probably debatable. Is there, you know, if there was a large renewables project that wanted to do some, to firm up some of its energy with with, you know, a couple of peakers, that might be more in our, in our space. Where it might lead to a great build out of renewables or make, you know, make projects viable where they, they wouldn’t previously be but, I mean, again, it’s interesting because we, look, we have a guideline for low emissions technologies, which is currently published on our website that says that we wouldn’t invest in technologies with exclusively of generation of less than, less than 50% of the emissions of the NEM. So that’s, that’s our current board guideline. Now, that’s, you know, up for debate, amendment discussion, and so on. So we’ll just have to see what crops up down the track. And you know, of course, there’s going to be a gap in the market, as well, you know, I think the big large players that own most gas fired power stations, EA, Origin, they’re not obvious customers of ours in that sense.
Giles Parkinson 10:43
No. And if you’ve got, yeah, just one quickly, if you’ve got this emissions target then, of half the NEM, then that basically rules out any standalone gas generators, unless that’s changed. And unless you can sort of put it as part of a firming package, so, you know, the emissions are then sort of calculated and diluted by whatever renewables it’s supposed to be firming.
Ian Learmonth 11:06
Yeah, I mean, that’s under the Low Emission Technology definition. There’s also, it could comply under renewables, if it was say, you know, an enabling technology with a large renewables project. And you know, you’ve seen people like Infigen, buy some gas firming to firm up their, you know, their generation to help with their C&I base. So…
Giles Parkinson 11:30
… but existing ones, not new ones. Yes, they’re buying existing.
Ian Learmonth 11:34
No, that’s right. I think that’s the sort of thing that, that we might kind of hone in on much more, so you know, it’s, it’s, as opposed to, you know, the other things that you that you suggest.
Giles Parkinson 11:47
David Leitch 11:48
Ian, I just wanted to turn on, there’s a $300 million Hydrogen Fund we could talk about, potentially, as well. But I wanted to ask you something I hadn’t in the past and outside of renewable generation, and that’s, that’s electric vehicles as I just, there’s this is one thing that frustrates me, it seems that as you know, we talk about energy security, and yet we’re 100% oil importer pretty much and we don’t seem to b,e the CEFC doesn’t seem to be doing much in the area of, I don’t know, finance for electric vehicle car fleets, or that sort of thing. Is just something you’ve….
Ian Learmonth 12:27
Yeah, look it’s, look it’s a fair question, David, we’re very keen, of course, on increasing the uptake of EV’s in the country and it’s, it’s not easy, Australia’s really been a very slow with it for a number of reasons. There’s not been a lot of affordable, necessarily a plethora of affordable models, EV models in this country. I mean, Tesla’s kind of dominated it, they’re not cheap vehicles. There’s a concern, there’s sort of a range anxiety concern in the country. Instead everyone thinks there’s somewhere they can, you know, recharge, even if they, most trips in a place like Australia are probably less than five k’s. And then there’s, and then there’s the, the general costs of, of running these things, or the cost of the vehicles available as models and the cost of the vehicle. So we look we have been financing EVs through you know, some of the wholesale financing programmes that we offer. In fact, we probably finance more Tesla’s than anyone. We’ve been trying to get fleet buyers interested in switching to EVs and we’ve had EV demonstration days in Sydney, Melbourne recently as only, as recently as a few weeks ago in Perth, where we’ve invited all those sorts of people, you know, because 60% of cars bought in Australia are bought by fleet operators and sort of seeing if can kind of we can kind of get them thinking harder and more about the idea of switching their fleets to EVs, but you know, look it’d be fantastic if the State and Federal government also took up , you know, their own undertaking to introduce government EV fleets because the more you have in the system of course means the more people see driving around they get more comfortable, the more EV charging is going on. We made investment last year interestingly enough, in Jet Charge, the, the EV recharging company here in Australia, we now got about 15, 16% of Jet Charge. It’s a great company, Tim Washington, who’s the CEO, very active in terms of the EV council here in Australia, so we’re doing what we can. But yes, Australia is taking its time. There’s no question.
David Leitch 14:42
And just one last quick one from me here is just your balance sheet overall, or just generally, I mean, I think you, the CEFC funded about a billion dollars worth of investments last year, but have pretty much got that back from loans that were repayed early and loans that were never taken up for one reason or another, and sitting with, quite I mean, is it still a plan to grow the balance sheets?
Ian Learmonth 15:09
Yeah, it look, it is. I think what has happened is we’ve reached a certain level of maturity, because we’ve been lending and investing for about seven or so years, and increasingly, you know, when, if you if you’re at 80/ 85% debt, lots of the deals that we’ve written 3/4/5 years ago, of course, are either being repaid, or refinanced. There’s a lot of money coming back. And, as you say, $942 million dollars came back last year, as we put out about the same amount out the door. So we’ve got, as at 30 June last year, we’ve kind of got commitments of about 6.2 billion with about 4.6 billion out the door. And the trick is, now, how do we get our 4.6 up to, you know, 5.6/7/8, and so on, when you’ve got so much coming back, and, and that’s, you know, you’re kind of scrambling to even keep a steady state. And I think it’s, it’s about finding, you know, bigger deals that are going to have a great deal of impact. You’re not all, if you, if you start doing a bit more equity with, with with the harder transactions where the rest of the market doesn’t want to go, those checks might not necessarily be as, as big. As we know, the renewables, wind and solar market is matured, it’s slowed down with, with the challenges around the grid, the lack of PPA’s. So you’ve got all these different factors kind of coming into play. So we’re gonna work really hard to kind of even keep, keep the $4.6 billion out the door. But that’s the challenge over the coming years. And that’s, you know, we’ll probably touch a bit more on on what’s over the horizon. But yes, trying to deploy, continue to deploy, large amounts of capital in this space becomes a challenge.
Giles Parkinson 17:11
I’d like to just briefly just go back to the EV market. You described your open days that you’ve been having trying to get people to take up leases, and it doesn’t sound like, it sounds like you’re a bit disappointed. And I’m just wondering, why has the lease market been slow to embrace EV’s? And if I, correct me if I’m wrong, but I think you’ve kind of allocated up to 100 million dollars with people like Macquarie and other people to sort of accelerate the rollout of EVs in Australia. How has that money been deployed? If it’s been deployed at all? And to what effect?
Ian Learmonth 17:42
Yeah, it’s been, it’s been successful. The Macquarie financing is predominantly a Tesla financing facility. And that’s, that’s been very successful. So I guess, you know, people have, have access to that line of credit to buy EVs now. You know, interest rates are low, a lot of people who buy Tesla’s you know, may not necessarily, you know, they might use other sources of, of capital to finance them. And so it’s only really one lever, you know, you there’s, I guess there’s, there’s other things that, that we’ve got to get the economics, we’ve got to get people thinking that buying an EV is ultimately going to be cheaper over the longer term than an internal combustion engine car. You know, there’s a whole raft of things, there’s the cultural kind of aspect, there’s the, you’ve got to have lots of recharging around so everyone goes, “Well, I’m never gonna get caught out”.
Giles Parkinson 18:42
But I guess the studies already show it can be, it can be economically advantageous for a leasing company, looking at four year leases, not much difference, if any, and probably an advantage having an electric vehicle, but the penny doesn’t quite seem to have dropped yet.
Ian Learmonth 19:01
Not yet. I’m optimistic. I think some more models Giles, coming in. And someone being bold enough to, to lead the charge and you know, I mean, the South Australian government, although the prior South Australian Government had, were going to move towards EVs for the South Australian fleet. But I think that may, you know, still be on hold.
Giles Parkinson 19:26
I want, to before I pass back to David, one more question. The CEFC has invested in a lot of solar farms, either as a financier, sort of on debt and in some cases equity. We’ve seen a lot of cases where some of these solar farms have been delayed because of the grid congestion problems that you mentioned before. Some of this has resulted in liquidated damages claims and declarations of force majeure, there’s a few rumours, we don’t get to see much of it in real life because, unless they listed they don’t have to bring those to account. What’s happening out there, with, are you concerned about some of your investments? And to what extent have the delays been impacted and have caused damages claims to be initiated, and or faught?
Ian Learmonth 20:12
Yes, look, it’s a, it’s a very good question Giles. The, I mean we’ve done 24 utility scale solar farms, nine wind farms, and nearly three gigawatts of, of renewables. And so we see quite a lot with what’s happening out there. Many of those are still in construction, excuse me, many are in construction. And yes, there is a lot of challenges. There are challenges out there, you know, around grid connection times, cost, when you’ve got hybrid technologies, when solar, or put a battery in there as well, it’s new, it’s challenged for AEMO. And, therefore, and power prices have come off. In some cases, we’ve got merchant exposure out, in some cases. So there’s been, we’re a lender in nearly all of those deals, so there’s still plenty of equity in front of us, so we’re not at all concerned about losing any money on our projects. But there’s, look, there have been been some restructures in a number of cases, there have been, and you probably, you may have seen and reported significant increase in impairment charges that have just been introduced, sort of, in some ways, statistically, across the board, just because something’s in some of these issues we’ve had, we’ve had to increase our impairment in charges. So, you know, we’re trying to address some of these issues in, you know, using the capital that we have investing in transmission or the technologies that might help this along, but it will take a bit of time. And, you know, I think it’s until we sort of sort all of that out, we, you know, it may end up being a little, little slower the investment horizon for particularly wind and solar for a while.
David Leitch 22:08
And so I think the bad debt charges were about 60, or provision was about 60 million from memory, when I was glancing through the annual report. Ian, you said we might touch or come back to the area of priorities for the CFC going forward, and just looking forward, and I don’t know whether it’s the CEFC sort of pushing its agenda out there, and I use that word pushing in a sense, in a nice way or when the people approaching you, but, but, but, you know, I guess how much lending can you do and equity and investing and, and what are the areas of focus for you over the next 12 or even two years?
Ian Learmonth 22:48
Yeah, well, certainly the, you know, the grid is in, we’re trying to deploy capital already there. And we welcome the passing of the Grid Reliability Fund in the near term. And so the grid transmission will be, will be a focus. Hydrogen, you know, the government is, have, have identified $300 million on our balance sheet that we should be investing in the fledgling hydrogen sector. And so we’re working at the moment alongside Arena who, you know, they’ve shortlisted proponents under their programme of a grants programme. And theyr’e, that’s public. There’s a list of people on that shortlist. So we’re seeing what we can do in terms of concessional debt or equity, possibly, to help those. I mean, hydrogen, it’s interesting. I mean, there’s, you know, there’s a lot of talk of the big electrolyzer, driven by renewable energy and Australia’s got a, an abundance, of course of sunshine, particularly in, in the north of Australia. So I think the longer term trend around hydrogen is really exciting and positive, it’s just, it’ll take a little while to kind of get the economics, right. But that certainly over the coming years, we hope to be able to make significant investments in hydrogen and green hydrogen, everything to kind of do with that. Renewable energy zones, recycling, you know, we’d like to do some more in recycling investments. There’s a recycling fund that, again, the government have directed us to invest 100 million dollars in the recycling sector, so we’re working hard on that. Yeah. And look, the tech roadmap is another, I guess, directional influence for us, of course, the government have come out…..
David Leitch 24:50
….. well, is it Ian? It’s nice, nice of you to say that but my experience of the government targeting some of these technologies, you know, the market is already moving. I mean, we had Kerrie Schott, basically saying the other day to Giles that, you know, we’re going at the fast track pace. And I think that, you know, look on the Technology Roadmap, but doesn’t sound to me Ian like, there’s actually all that much prospect of growing the balance sheet unless you get some other than transmission. I mean, you can’t, hydrogen is still very risky business. You know, at the CEFC lender, it’s okay for Arena. You know, what about, I mean, there’s things like copper string, I suppose, and those projects in the Northern Territory for export and in Western Australia for export, but none of them are quite ready for CEFC money, are they? Maybe copper string?
Ian Learmonth 25:45
Yeah, the other, look David, the other area that is, is obviously ripe for investment of course is large scale batteries, and pump storage. And you would have seen last year we we increased horn sales capacity by 50%, with the first limited recourse loan sitting in Australia on a grid scale battery. And there are some other battery projects in our pipeline, which we look forward to sharing with you very soon. And so I think there will be a raft of big battery deals, I mean, only so many of them before, I guess the economics start to erode the previous battery, but there’s certainly room for batteries, deploy significant amounts of capital into some battery deals for a while. Now pump storage is another one of those big capex of items, then, you know, that is on the tech roadmap, the large scale, 8 hour plus storage. And we’ve you know, we’ve got a couple of those projects that we’ve been actively working with over the last, well, couple of years. These things, you know, they’re big, they’re lumpy. The, the EPC price is critical. Are they, or are they not in the right part of the grid? How’s the transmission cost going to impact on it all? So they, you know, we would also love to deploy some large licks of capital into pump storage over the coming years.
David Leitch 27:30
Yeah, yeah. And I do recall that last time we spoke, you were hopeful of funding a project in South Australia, as was Darren Miller at Arena. But of course, it hasn’t happened so far. And I think myself, that’s because both for gas and pumped hydro, the battery economics have improved so fast, and batteries do so many other things in the grid, besides just shifting energy around that they’re rapidly coming to be the technology of choice in anything of shorter duration. I guess the question I wanted, and one little bit from me is in terms of other things like micro grids and stuff like that, it seems to me that lots of micro grids put together can be a new way of controlling the system. Is there anything on the horizon there? or?
Ian Learmonth 28:19
Yeah, look, we were very pleased to be part of a, well, technically, my career, of virtual power plant in South Australia, quite recently, the end, of end of our last financial year where the South Australian government, using the public housing roofs, it has a plan, I think they’ve already done about 1000, they were aspiring to get to about 3000 houses with both three and a half kilowatt, sorry, five kilowatt, PV and three and a half kilowatt hour battery storage systems. And we’re putting in the senior debt. There’s, the government are putting in, the South Australian government are putting in some money, Arena’s putting in some money. And the plan would be to get to something like 20 plus meg’s of solar that is controllable on the rooftops of South Australian public housing, which, which is a pretty exciting idea. And we’ve had a few false dawns with VPPs, but this one is, is underway. So that’s that, you know, we’re excited about that we’d like to see more of those things. They’re not necessarily straightforward. There’s all the challenges, technology challenges of getting all the inverters to talk to each other or various residents to sign over. You know, the control of the, of the power, so it’s, you know, there’s a fair bit of work that goes into these sorts of things. So it was good that South Australians could, of course get to control their own public housing. So that’s, that was a bit of an achievement. And, you know, we look, we’d hope to see some more of those.
David Leitch 30:04
And just quickly, stealing one from Giles again, but also on the bulk wind and solar, most of the projects that you’re going to want to look at are going to require a PPA of something or something like that, or support from the State Government. And the last year we’ve seen a lot of support from the Queensland Government, the ACT Government, Snowy Hydro has, on the other hand, and some, but I mean, from the projects you look at at the moment, how is the supply of projects looking? And is there much of a PPA market around to support it still?
Ian Learmonth 30:37
There are some projects around with with PPA’s. But yes, that’s definitely the constraining factor out there at the minute. And yeah, you’re probably starting to get, you know, the more corporate PPAs, we’ve seen some of the technology companies buying renewable energy. At the moment, we are still prepared to take merchant exposure, in certain circumstances where we think the project is strategically interesting, it’s in the right part of the grid, it’s going to, you know, it’s going to lead to, what’s, you know, we need generation in that, you know, in that part of wherever it might be in the NEM. But, you know, we’re like everyone, we’re probably increasingly cautious about where wholesale power prices are heading over the next five or 10 years. And, you know, a lot of our private sector equivalent lenders, you know, the big Aussie majors and others, extremely reluctant to lend merchant on merchant power prices, merchant projects. So that is, that that is a challenge, as there are less PPAs, the routes been filled out effectively. It is creating a bit, you know, there’s less of a price signal for investment. You know, we’re open minded if we think something’s important, there’s a market gap, strategically important project. But it’s..
Giles Parkinson 32:11
in close, quick, rapid fire questions. You mentioned big batteries. And that usually gets me excited. It’s just coming in on already announced projects, are these going to be deals with the ones that we don’t yet know about?
Ian Learmonth 32:23
I think in one case, the programme has been announced. And so we are, you know, we’re still kind of working away with a couple of the proponents there, and there are the earlier stage ones. So yeah, I think, I think there is probably, you know, a couple of interesting large scale battery projects. I think we’ll, you know, we’ll be talking about in the near term. And we also, of course, have just, while we’re talking batteries, we, you know, we still have our, a more consumer finance business invariably with, with partners like Plenty, who used to be called Ratesetter, where we’ve been offering cheap loans to put batteries in houses. And that’s been quite successful in South Australia. And in regional New South Wales with this fall of the……
Giles Parkinson 33:25
Another one just off topic a little bit. I just got a couple of emails last week so I sort of feel obliged to ask the question. There was an announcement about a hotel fund, in which I think it’s already been previously announced that the CEFC is involved in. Can you just sort of clarify just what on earth the CFC is doing in a hotel, in a pub in a, in a fund backing pubs? I presume, it’s to make the operations more efficient, particularly the refrigeration, I think? Just that , just very briefly?
Ian Learmonth 33:54
Yeah, absolutely. So that’s Pro-Invest who, who are a hotel operator and developer and they, they operate under the Holiday Inn banner in many cases. And they are building out hotels in Australia over the coming years, at a higher level of, you know, energy efficiency and sustainability than we’ve ever seen before. So we’re really excited to be working alongside those guys that have a track record in the space. But yes, that’s right. They’re going to be built to a spec that we’ve never seen before………
Giles Parkinson 34:41
I look forward to seeing that. Just one last question for me and David might punch on with a couple more, but it just seems to me that you what you’ve been hinting at during this conversation today is that you’ve got money and it’s actually hard to get money out of the door. There seems to be an extraordinary situation for a country and a world where we know we have to transition very, very quickly. We know that there’s a heck of a lot of capital out there, we just kind of looking for the policies and the other factors to actually enable that investment to be made. Is that a fair summary of the situation, and how do we actually get across this?
Ian Learmonth 35:19
Yeah, well, that’s right. I mean, we’ve got only so much capital to do, but ours is at the, at the forefront, and it’s trying to help unlock things and lead the charge, take risks that others aren’t prepared to take. Behind us, of course, is untold billions of, of interested capital, because as a macro theme, you know, in the superannuation sector, the big banks, international funds all want to invest in the clean energy sector. It’s, it’s, you know, it’s, it’s a, it’s a good news story, it’s, you know, people, young people want to see their capital being put to work. But it’s not all about the capital, as you say, you know, you can, you know, you it’s, it’s really a combination of, of the, you know, there’s capital, there’s regulation, you know, you got to have the right price signals, for people, for entrepreneurs to want to kind of do what they’re required to do. So yeah, I think it’s sort of working hand in glove with State and Federal governments and helping them create the right environment. We and Arena coming along with that sort of the front line of the capital and then drawing in the private sector alongside it. So they’ve got they’ve got the deepest pockets. And today, you know, well last year, I think, for every dollar, we put out the door, there was about to $2.30 of private sector capital. So we always keep a bit of an eye on, on that. But yeah, so it’s look, yeah, we’re all about drawing in the, drawing in, in the private sector, ultimately. But yes, they’re only going to go there where they think they’re going to make a reasonable return.
David Leitch 37:15
Ian, my last question will be, again, not directly about the CEFC, but from your position, sitting across the lending and financing of a lot of what happens in the industry, and I think the CEFC has been a very important role, and it’s grown a lot as you’ve there. But we look at all these policy changes, and there’s a massive amount of it. I’ve just, you know, on the one hand, the policy changes create a lot of uncertainty, the regulatory changes, and on the other hand, there would be some of us that think that they don’t go far enough. I’m just wondering, I guess, are you satisfied with the reform process? Or would you be offering any suggestions? Or do you have any thoughts about it?
Ian Learmonth 38:03
Yeah. I mean, you know, we don’t, I guess, participate in the public arena. And in in terms of critiquing policy, particularly Federal Government policy given we, you know, are a part of the family if you like. So we, you know, we just try and deliver what we, what we can decarbonize the economy, stick to the act, stick to the investment mandates, as they, you know, are passed down by the government. But when we work, of course, with other governments, state governments, we, you know, we try and kind of encourage them and give them, show them what we’re seeing and hope that they’ll come to sensible conclusions, but it’s not really our natural home to, you know, we work closely with the Department and we, and the Minister, of course, but we’re not, you know, we’re not out there as advocates, in a policy sense. We’ve certainly out there sharing knowledge, which I think is a really important thing for us to do, you know, what are we seeing in terms of “where’s the battery market heading?” Where’s the you know, where the solar sector scene today? EV’s – the challenges with that? All those sorts of things, I think is, is where we’re best having a more public role.
David Leitch 39:25
And what’s your highest priority for this year ahead, then, might I ask?
Ian Learmonth 39:31
Look, I’d really like to have some runs on the board with with some of its grid related investment, be it at the technology end or the big lumpy infrastructure end because till we sort all of that out, we’re not going to get another burst of investment in in renewables, which is, of course, so important. We’ve seen that identified very clearly with a the AEMO’s ISP, but yes so that you know grid reliability, large scale storage, hydrogen. They’re the sort of areas that we’re really focused on over the coming twelve months. You know it’d be be great to you know, to look forward to, over the, you know, being able to say even over the coming months, hey, we’ve just done a big distribution, transmission deal, done another big battery, first of our hydrogen deals, maybe that might not be till till the end of the year or, or even next year, but we’re certainly, they’re, you know, they’re all key priorities for us.
Giles Parkinson 40:44
Thank you for joining the Energy Insiders podcast once again.
David Leitch 40:47
Thanks very much.
Ian Learmonth 40:49
Thank you very much for having me. Lovely to be here.