Blue sky con­cepts win main­stream sta­tus

The Weekend Australian - Review - - Clean Energy - Derek Parker

ADECADE ago, try­ing to raise funds for a ‘‘ clean’’ power project or to con­duct re­search into a promis­ing area was a task of Her­culean pro­por­tions. But in the past five or six years the pic­ture has changed dra­mat­i­cally, with in­vest­ment in new power tech­nolo­gies mov­ing into the fi­nan­cial main­stream.

‘‘ The ‘ clean­tech’ mar­ket is still in the de­vel­op­ment stage,’’ says Jef­frey Castel­las, CEO of Clean Tech­nol­ogy Aus­tralia, a firm that brings to­gether in­vestors and com­pa­nies for knowl­edge ex­change and com­mer­cial in­ter­ac­tion. ‘‘ But it is firmly es­tab­lished on the growth path. There is a sense of crit­i­cal mass emerg­ing. We are see­ing a lot of money, both Aus­tralian in ori­gin and from over­seas in­vestors, go­ing into proven tech­nolo­gies like wind power — but there are also funds avail­able for re­search into new tech­nolo­gies that might cur­rently be called spec­u­la­tive but are likely to have a role in the longer term.

‘‘ It is sig­nif­i­cant, I think, that ‘ clean­tech’ is now be­ing recog­nised as a new in­dus­try. It is now seen as an op­por­tu­nity to make good money if you do the right anal­y­sis and make the right choices, like any other sec­tor.’’

Aus­tralian com­pa­nies are be­com­ing glob­ally known for their ex­per­tise in re­new­able en­ergy tech­nolo­gies, as well as clean coal tech­nol­ogy, both be­cause of the qual­ity of the re­searchers in­volved and the range of projects cur­rently un­der way.

Equally, a strik­ing fea­ture of the in­vest­ment mar­ket in al­ter­na­tive power tech­nol­ogy is the breadth. There are es­tab­lished com­pa­nies in­vest­ing in the area as well as small firms that have suc­cess­fully listed on the ASX as a way of at­tract­ing cap­i­tal. For in­vestors, there are eq­uity or debt op­tions avail­able, with a spec­trum of risk pro­files.

‘‘ For large com­pa­nies, there was a big change when they started to adopt their own sus­tain­abil­ity strate­gies,’’ Castel­las says. ‘‘ Once you have be­gun to think about en­ergy ef­fi­ciency in your own op­er­a­tions, it’s a small and log­i­cal step to in­vest­ing in clean tech power gen­er­a­tion.

‘‘ An­other big step has been the in­volve- ment of sev­eral of the big su­per funds. That has been led from the top, but it’s im­por­tant that the broad mem­ber­ship has been will­ing to sup­port it, both be­cause they see it as a good fi­nan­cial op­por­tu­nity and a key so­cial ob­jec­tive. We have also seen re­spected fi­nan­cial in­sti­tu­tions like Mac­quarie Bank and NAB move into this area suc­cess­fully, cre­at­ing spe­cific di­vi­sions to fo­cus on it. That has cre­ated a feel­ing of mo­men­tum. At the same time, there are now enough op­tions in the field, be­tween proven tech­nolo­gies and emerg­ing ones, that an in­vestor can spread their risk.’’

Castel­las points to gov­ern­ment in­volve­ment, from fed­eral and state lev­els, as an im­por­tant sup­port. The will­ing­ness of gov­ern­ments to con­trib­ute sub­stan­tial sums to de­vel­op­ment projects has both raised the profile of the clean en­ergy field and pro­vided a stable fi­nan­cial foun­da­tion. He nom­i­nates Vic­to­ria as the state that has prob­a­bly done the most to fos­ter the clean power in­dus­try, both in set­ting tar­gets and as­sist­ing with fi­nance, and points to the re­cent agree­ment be­tween Vic­to­ria and Cal­i­for­nia for col­lab­o­ra­tion on cli­mate change ac­tions.

But there is a prob­lem in that there is still not enough fi­nan­cial skill amongst the peo­ple try­ing to raise funds, who tend to come from a tech­ni­cal back­ground, and not enough tech­ni­cal knowl­edge in the fi­nan­cial com­mu­nity. ‘‘ We are be­hind the US and Europe in this, but it is get­ting bet­ter,’’ Castel­las notes. ‘‘ You have to re­alise that this has all moved very fast.’’

One com­pany that has emerged as a key in­vestor in clean power tech­nol­ogy is Ori­gin En­ergy, usu­ally known as a main­stream gas pro­ducer and a gas and elec­tric­ity re­tailer. But, ac­cord­ing to Ori­gin’s Tony Wood, the com­pany is look­ing to a fu­ture as an in­te­grated en­ergy com­pany.

‘‘ We have two gas- pow­ered, base- load elec­tric­ity gen­er­at­ing plants planned, in Queens­land and Vic­to­ria, in­volv­ing about a bil­lion dol­lars of in­vest­ment each,’’ he says. ‘‘ Gas in­volves about half of the emis­sions for black coal, and about one- third for brown coal, so it is a ma­jor step for­ward in re­duc­ing the green­house gas emis­sions from the elec­tric­ity sec­tor, the largest source of Aus­tralia’s emis­sions.’’

Ori­gin has also been a key fi­nan­cial sup­porter of more ef­fi­cient, cost- ef­fec­tive pho­to­voltaic cells, called sliver tech­nol­ogy, con­ducted by the Aus­tralian Na­tional Univer­sity’s Cen­tre of Ex­cel­lence for So­lar En­ergy Sys­tems. A pilot plant for the man­u­fac­ture of cells is op­er­at­ing in Ade­laide with very promis­ing re­sults.

Sliver tech­nol­ogy has the po­ten­tial to re­duce the cost of so­lar- gen­er­ated elec­tric­ity to a fig­ure com­pet­i­tive with the re­tail price of elec­tric­ity gen­er­ated from fos­sil fu­els, cur­rently about 12- 18 cents per kilo­watt hour.

Wood notes that Ori­gin has al­ready put over $ 40 mil­lion into the re­search and de­vel­op­ment of sliver cells, and more will be needed to com­mer­cialise the tech­nol­ogy in a rapidly grow­ing mar­ket. This will in­volve achiev­ing man­u­fac­tur­ing scale, se­cur­ing sup­ply of high- grade sil­i­con and ac­cess­ing the global mar­ket.

‘‘ Sig­nif­i­cant in­vest­ment has been in­volved,’’ he says. ‘‘ We see it as an in­vest­ment in the fu­ture, not only en­vi­ron­men­tally but fi­nan­cially. The shift in think­ing of the past few years has not only iden­ti­fied the prob­lems of a car­bon- con­strained world but has also opened up a host of strate­gic pos­si­bil­i­ties. The en­ergy sec­tor used to be, well, a bit on the dull side, known for sta­bil­ity rather than rapid change. But now it’s an ex­cit­ing place to be.’’

Ac­cepted: Jef­frey Castel­las says new tech­nolo­gies, even if spec­u­la­tive, at­tract in­vestors

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