Low Emissions Technology Commercialisation Fund

What is Low Emissions Technology Commercialisation Fund?

The Low Emissions Technology Commercialisation Fund was launched by the Australian Government to turbocharge investment in Australian companies to develop new low emissions technology.

 

Background

“Our Plan to reach net zero by 2050 is an Australian one that’s focused on technology not taxes and this Fund backs in Australian companies to find new solutions,” the Prime Minister said.

“Australia can become a world leader in creating low emissions technology that is both affordable and scalable, helping get emissions down while creating jobs.

“We are backing Australian businesses by creating an environment for their successful ideas to thrive in contrast to Labor’s approach to always wanting to tax success.”

Minister for Industry, Energy and Emissions Reduction Angus Taylor said the Fund demonstrates the Government’s commitment to achieve net zero emissions through investments in technology.

“The Fund will support Australian innovators to develop their intellectual property and grow their businesses in Australia,” Minister Taylor said.

“It will address a gap in the Australian market, where currently small, complex, technology-focused start-ups can be considered to be too risky to finance.

“Together with other new initiatives, like the increased investment in establishing seven Clean Hydrogen Industrial Hubs around Australia, today’s announcement brings our commitment to more than $21 billion of public investment in low emissions technologies by 2030.

“Our investment will leverage 3-5x that amount in co-investment from the private sector and other levels of government, or between $84 billion and $126 billion in total investment by 2030.”

The Government will introduce legislation to establish the Fund in this term of Parliament. The Fund is expected to earn a positive return for taxpayers.

 

Objective

Prime Minister Scott Morrison said the Fund would back Australian early stage companies to develop new technology. The Low Emissions Technology Commercialisation Fund is expected to help in country’s aim to reduce emissions by 26% to 28% by 2030.

 

Funding

The Fund builds on the CEFC’s success as the world’s largest government-owned green bank. The CEFC has committed $9.5 billion across 220 large scale projects and 23,700 smaller-scale transactions, driving $33 billion in new investments across the economy.

 

Eligibility

The fund will target projects and businesses that use technologies that have passed beyond the research and development stages but are not yet established or of sufficient maturity, size or otherwise commercially ready to attract sufficient private sector capital.

Investments will have the primary purpose of earning income or a profitable return and may be in the form of debt products or equity investments or a combination of both. ‘Clean energy’ technologies include renewable energy, energy efficiency and low emissions technologies.

The fund will target projects such as large scale solar with storage, off-shore energy, biofuels and smart grids. An example could be a large scale solar facility with storage in Port Augusta. Since 2012, both the CEFC and ARENA have identified projects where a different form of financing would have been the best way for government assistance to bridge the gap between research and commercial application.

 

Case Studies

Here are some case studies from the similar Clean Energy Program.

Omni Tanker – $4M

Omni Tanker is drawing on a $4 million equity investmen to commercialise its technology in the bulk liquid transport equipment market. The Omni road tanker and the OmniTAINER®, a portable tank container (ISO tank), are designed for intermodal applications. The investment from the Low Emissions Technology Commercialisation Fund is part of broader $7.9 million capital raising by Omni Tanker, which will substantially expand its NSW manufacturing plant and specialist workforce to increase production capacity.

The combination of light weight and exceptional chemical resistance of Omni Tanker’s carbon fibre tanks means transporting them requires less energy and produces lower emissions. Additionally, while traditional rubber lined stainless steel tanks are dedicated to one product and generally carry goods in only one direction, the chemical resistance and easy washout of the OmniTANK’s patented seamless thermoplastic interior means they can be two-way loaded, reducing asset down time and empty running, increasing the efficiency and capacity of transportation routes.

Source

Wattwachers – $4M

The CEFC is investing $2 million,, as part of Wattwatchers $4 million 2016-17 Series A capital raising. The first $2 million tranche is held by Renewable Energy Venture Capital fund (REVC), which is independently managed by Southern Cross Venture Partners (SXVP) for co-funders the Australian Renewable Energy Agency (ARENA) and Softbank China. The CEFC finance will help the Sydney-based company lift its production volumes and drive down production costs.

Wattwatchers technology can be used across residential, commercial, industrial and utility services because it works with a wide range of software applications. It potentially works alongside other smart technology applications, battery storage and microgrids to reduce energy consumption, encourage better energy saving habits and increase the ability to tap into locally generated rooftop solar.

Source

Relectrify – $750,000

The Clean Energy Finance Corporation is committing $750,000 equity to Relectrify to help “prove” the business with further development of the technology and initial trials.  The investment is part of a $1.5m pre-Series A equity raising by Relectrify.

Melbourne-based company Relectrify is developing and commercialising control technology that unlocks extra performance in battery systems by boosting their second-life storage capability and lifespan once they are no longer effective as electric vehicle or plug-in hybrid car batteries. Relectrify’s technology focuses on providing an affordable, sustainable energy storage alternative by giving the batteries in today’s electric cars the potential to power households tomorrow.

Source

Zen Ecosystems – $5.5M

The CEFC, made a cornerstone equity investment in Zen Ecosystems as part of its 2018 series B capital raising.  The CEFC has invested more than $5.5m to further develop and deploy the Zen HQ and Zen Thermostat products in Australia and internationally.

Zen Ecosystems has developed intelligent energy management solutions that could save Australian businesses up to 25 per cent on their energy costs. The company is increasing deployment of its innovative Zen HQ and Zen Thermostat products in Australia, drawing on finance from the Low Emissions Technology Commercialisation Fund.

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