Govt to set up $10bn clean energy fund

The federal government will set up a $10 billion fund to invest in clean and renewable energy as part of its carbon pricing package.

The Clean Energy Finance Corporation (CEFC) will be run by an independent but government-appointed chair and a board comprising experts in banking, investment management and renewable energy.

It will invest $10 billion over five years from 2013/14 in businesses seeking funds to get innovative renewable and clean energy proposals up and running.

It will also help existing manufacturers transform to help them meet new demand in the clean energy sector for goods like wind turbine blades and solar panels.

"These government-backed investments will deliver the financial capital needed to transform our economy," the government said in a statement.

The corporation will not invest in carbon capture and storage technology because it is already supported through existing programs.

The government also confirmed it would also set up an Australian Renewable Energy Agency to manage $3.2 billion in existing renewables funding and a $200 million Clean Technology Innovation Program.

The government wants 20 per cent of Australia's energy to come from renewable sources like wind, solar and geothermal by 2020.

The Australian Greens, instrumental in drafting the carbon pricing package, said the CEFC would help drive a surge in renewables.

"The Australian community is crying out for renewable energy and I am delighted that we have been able to deliver Australia's biggest ever public investment in renewable energy," Greens deputy Christine Milne said.

Australian Solar Energy Society boss John Grimes said his industry was a big winner under the policy.

"We will see solar on steroids," Mr Grimes said. "We are finally penalising pollution and rewarding clean energy."

The Australian Geothermal Energy Association said the government's scheme would provide a foundation for the development of clean energy projects.

But the Cooperative Research Centre for Greenhouse Gas Technologies said it was disappointed the fund would not invest in carbon capture and storage.

Australian Manufacturing Workers' Union national secretary Dave Oliver said it was essential the funds were used to create local jobs.

The government on Sunday also announced the creation of a new $946 million Biodiversity Fund to protect Australia's unique species from the effects of climate change.

The government says it will also provide $40 million in grants over the next four years to industry associations and non-government organisations to promote energy efficiency measures among small businesses and community groups.

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