Progress for clean energy projects
Australia is undergoing an energy revolution.
Fossil fuel generators are retiring while renewable energy projects are on the rise.
How do we realise the true potential of renewable penetration given current market constraints? The Clean Energy Transfer Fund offers the solution.
There is a significant supply of high quality and uncommitted renewable energy projects (currently in excess of 5GW). Each one deserves special attention, without being subject to distracted utilities and corporates. We remove this hassle and focus on the quality and relevance of projects.
Large scale decommissioning of thermal assets is set to continue over the near to medium term. At the same time, an increasing penetration of renewable energy and distributed energy resources with decreasing reliability of thermal creates a systemic volatility price risk for project owners.
Supply of debt capital within the Australian market, while strong, remains conservative. Merchant risk exposure does not necessarily allow for long-term funding on a reasonable basis. This drives reliance on debt funding. A key requirement for this is revenue security underpinned by a power purchase agreement (PPA), which secures the highest quality debt on the best terms.
However, the low rate of traditional PPAs executed by traditional off-takers coupled with highly variable or short-term PPAs by corporates or retailers, constrains bankability.
Appropriate PPAs are therefore required for renewable projects to secure funding.
The CETF will be providing long-term, fixed-price bundled PPAs to projects to meet this need.
Who We Are
Our success depends on the strength of our team.
The Clean Energy Transfer Fund is an Australian-based energy trading fund with a focus on returns.
We currently hold in excess of A$100M assets under management. The fund provides traditional, bankable PPAs to medium and large clean energy developers across the National Electricity Market in Australia.
The Fund practices multi-market risk management through its multi-market capabilities. By leveraging traditional and non-traditional financial markets to manage price and volume variability, the Fund is able to realise uncorrelated returns.
Applying the PPA to take renewable energy projects forward
Renewable energy in Australia is already cost competitive with other sources of energy, and more competitive than new-build thermals.
The key difference is that renewable energy still largely relies on project finance and is highly geared. This creates a hurdle for asset owners, as project finance traditionally relies on long-term revenue certainty in excess of the life of the loan. The quality of the loan secured by a project is directly correlated to the quality of the long-term revenue stream or PPA.
Fit-for-purpose PPAs are needed to support renewable energy projects. These provide revenue certainty to clean energy generators. The PPA must offer certainty on term, price and credit quality to support projects in securing funding. By contractually agreeing to long-term (usually 10-year), fixed price bundled PPAs, this would typically allow the project owner of existing projects to potentially be refinanced on better terms, with new projects achieving Financial Close and commencing construction.
The Clean Energy Transfer Fund secures PPAs from existing and new green energy projects across the National Electricity Market (NEM) in Australia.
The Fund manages the market risk exposure of the project through selling into the NEM, as well as over the counter (OTC) contracts on variable tenors.
Trading includes physical energy commodities, futures and OTC contracts with other market participants and large energy consumers.
LETTERS OF CREDIT
The fund is cash collateralised and PPAs are supported through Letters of Credit and risk transfer to reinsurers, thus ensuring the credit support standing behind the PPA does not expose the PPA seller to market or insolvency risk.
— Australian-based Energy Trading Fund —
We Are Here For You
Rob is a specialist in understanding project development, equity investment and risk transfer for the energy sector, as well as financial institutions and utilities within the infrastructure sector. He has over 15 years’ experience covering Australia, Africa, Middle-East, South East Asia and Europe with Swiss RE, PWC, World Bank Group, the Australian Federal Government, IPPs, Tata Power and a corporate finance house.
Rob’s core experience spans climate change, renewables (wind, solar, hydro and biomass) and non-renewable energy assets (coal, gas and hydro) and portfolios, Rob has successfully tackled key strategic projects and built businesses.
Nick has extensive global and senior executive experience, along with a deep and successful history of building businesses. From 2006 until 2015, he served as the Managing Director and Chief Executive Officer of Hyundai Construction Equipment Australia, and currently serves as either Chairman or non-executive director of 11 companies across Australia, New Zealand and the United Kingdom. Nick’s experience is broad across many industries including civil construction and infrastructure projects, mining and resource extraction, finance and technology, automotive and engineering.
Adviser to the Board
With 30 years of experience in the finance industry, 25 of those as a direct professional investor in environmental projects, James uses his wealth of knowledge and expertise to counsel corporations and business owners around the world.
Recognised for his proficiency in mining, construction equipment, property development, feature films and biotech, James is especially sought-after in evaluating, negotiating and matching stakeholders’ decision-making to desired outcomes.
Senior Quantitative Analyst
Jason is an experienced quantitative researcher with 20 years’ experience in energy markets, fixed income, derivatives and investment portfolios.
He has held senior quantitative analysis and risk executive roles across a range of organisations including BHP Billiton, Commonwealth Bank, Standard Chartered Bank, KPMG and Suncorp. Jason holds a PhD in quantitative finance along with degrees in science, statistics, and engineering, and is also a CPA, CIMA and Professional Risk Manager (PRMIA).
Independent Risk Advisor
As an independent consultant, Peter has over 21 years of practical and advisory experience across the energy value chain covering consumers, retailers, networks, wholesale market participants, developers, generators, regulators, governments and investors.
Prior to establishing Seed, Peter worked in a senior management capacity at Energy Australia, AGL, Pulse Energy, United Energy, IKON Energy and KPMG, gaining considerable expertise in strategy, risk management, and policy development in the gas, electricity, carbon and renewable energy markets.
A member of ARENA’s advisory panel, Peter is also the Chair of AusNet Services Customer Consultative Committee and was previously Chair of CitiPower, Powercor and United Energy’s Energy Futures Consumer Advisory Panel (2018-2019). He is also a qualified actuary with strong analytical skills, and extensive experience in the financial services industry.
Senior Energy Trader
Since 2002, Craig has been responsible for the development and execution of hedging and trading strategies across a wide range of international commodity markets, including Australian power. Over this time, he has developed a career focus on asset optimisation using derivative products, while facilitating the unique alignment of objectives required between physical and financial portfolios.
Combining this experience with an INSEAD Executive Master in Finance, Craig brings a well-rounded and pragmatic approach to his engagement with markets and customers, continuously developing new perspectives on managing portfolios.
Clean Energy Transfer Fund FinCo Pty Ltd
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