This week I thought I’d provide quick debrief on the Business Council of Sustainable Energy’s (BCSE) Financing Renewable Energy (RE) conference. The intention is to provide an overview to highlight any common ground of differences as seen from downunder.
The day long event was a side event to the 2 day National BCSE conference up in Brisbane, Australia. The ~40 attendees representing predominantly RE companies heard presentations from a range of speakers from the renewable energy industry, legal and government. In particular highlighting the key challenges for business about investment into RE and how the finance industry really does have that key role of “Investment”, ie taking a risk to develop something new, to deploy RE projects.
These highlights included:
- The conference reiterated that sustainable energy companies and projects are well positioned to approach the investment community as part of the cleantech category class which is attractive to investors (not “envirotech”) if looking to raise capital
- Cleantech investing is key to achieving sustainable development and will allow Australia to play a significant role in renewable energy markets in Asia
- Australia’s project financing into RE developments is increasing significantly into the region. This includes financiers but also Australian companies establishing Clean Development Mechanism (CDM) projects under the Kyoto protocol in Signatory Countries. This involves utilising effective legal structures to allow Australian Companies to trade carbon emission reduction (CER) credits via european market. Two project examples were two hydro plants recently established in Fiji by Pacific Hydro
The key issues:
- Lack of confidence and understanding in JV arrangements into China and India particularly in investment community.
- Its easier for larger companies to establish in these markets than smaller ones on basis of setup cost, and relationship development and good (paid) financial and legal advice. But small companies can fill niches particularly in remote and rural tech.
- The Australian market for RE deployment at consumer level is small due to its market size (20m people) with the exceptions of industrial RE eg in mining, cogeneration, waste to energy projects.
- Australian companies have expertise across niche areas in areas of remote power, hydro, wave, and small scale implementation effective in rural and off grid applications. These tech’s have application through SE Asia, Islands, China and India.
- In coming blogs I’ll profile a couple of the companies we met up in Brisbane. However it was clear at this event that local market knowledge, good legal advice, knowledgeable investors and experience were key to successfully capitalising on Asian market opportunities.
Clean Technology AustralAsia’s upcoming AustralAsian Cleantech Finance & Investment Forum, 22 August, Sofitel Melbourne 2006 will delve into some of the above issues and market characteristics. The main theme of the conference is Building Australia’s Cleantech Future. This encompasses providing a platform for investors and companies to discuss the challenges and learnings from Asian market experiences, and investigate how to leverage Australia’s large super/pension funds into project finance and cleantech company investments.
Nick Bruse is the General Manager of Clean Technology AustralAsia Pty Ltd, the organiser of the AustralAsian Cleantech Forums and Dealer Forums, and the leading advocate of Cleantech in Australia. Nick does a weekly blog column on Cleantechblog profiling innovative Australian cleantech, energy, water and environmental technology companies.