Sphere Quarterly Newsletter
Quarter 2 2023 Highlights | July 2023
Public sector and policy
Public sector and policy updates from Q2 2023.
Towards net zero
Cwth Government allocates an additional $20.5Bn to CEFC: the Clean Energy Finance Corporation kicked off its second decade in Jun-23 with the announcement of an additional $20.5Bn in funding allocated from the Commonwealth Government. The additional funding is accompanied by the creation of three new investment priorities:
$19Bn to help deliver the Rewiring the Nation program
$1Bn to create the Household Energy Upgrades Fund
$500M million for a new Powering Australia Technology Fund.
WA Government issues inaugural $1.9Bn green bond: Western Australian Treasury Corporation announced the launch of an inaugural $1.9Bn green bond in Jun-23. Investments in the long-term debt facility, which matures in Jul-33, will flow to eligible government projects that deliver environmental outcomes such as the decarbonisation of the State’s electricity grid.
QLD Government signs MoU with Qantas to expand local SAF industry: the Queensland Government and Qantas announced a memorandum of understanding in May-23 to develop a Queensland-based sustainable aviation fuel supply chain. The decision follows the government’s vision of Queensland becoming an Asia-Pacific green jet fuel hub.
Australia and India establish green hydrogen taskforce: the Australian and Indian Governments announced the signing of the Terms of Reference of the Australia-India Green Hydrogen Taskforce in May-23. The taskforce will help to identify opportunities for bilateral cooperation in the development of renewable hydrogen projects and contribute towards reducing global emissions.
Cwth Government to legislate a nation Net Zero Authority: the Commonwealth Government released plans to legislate a Net Zero Authority in May-23.The Authority will support workers in emission-intensive sectors, coordinate programs and policies related to the energy transition and help investors, as well as companies, engage with net zero transformation opportunities.
Victoria’s SEC searches for its inaugural investment: in May-23, Victoria’s State Electricity Commission released the SEC Pioneer Investment Mandate and called for Registrations of Interest from market participants to identify suitable renewable energy generation and storage projects across Victoria. The government-owned SEC intends to announce the pioneer investment(s) by the end of 2023.
Towards a circular economy
Melbourne water corporations launch the Greater Melbourne Urban Water and System Strategy: Greater Western Water, Melbourne Water, South East Water, and Yarra Valley Water jointly announced a three-pronged approach to Melbourne’s water supply management in the Greater Melbourne Urban Water and System Strategy in Apr-23. The strategy emphasises the role of unlocking water efficiencies, diversification, and new water supply to help the state manage future demand variability.
NSW Government secures legislation to prevent privatisations of public water utilities: the New South Wales Government successfully passed the Constitutional Amendment Bill 2023 in Jun-23 to protect the statutory state-owned water corporations, Sydney Water and Hunter Water, from privatisation. Additionally, a parliamentary inquiry will investigate how other regional water utilities can be similarly protected.
NT Government releases inaugural Territory Water Plan: the Northern Territory Government released its final Territory Water Plan in Jun-23. The Plan aims to deliver water security for all Territorians and coordinate water management functions across government in the areas of water resource management, services, utilities, policy, legislation, regulation and use.
Cwth Government announces water ownership for First Nations people: First Nations Australians and the Commonwealth Department of Climate Change, Energy, the Environment outlined commitments to several water initiatives in May-23. The scope of work includes ongoing consultation from the Committee on Aboriginal Water Interest to develop options for a water holding model and involvement of First Nations peoples to determine effective practices for water entitlement management.
QLD Government seeks feedback on private infrastructure investment: the Queensland Government published the Future Infrastructure: Private Investment - A Statement of Opportunity Discussion Paper in Jun-23, outlining the State’s priority infrastructure needs and opportunities for private investment across the infrastructure life cycle. ‘Developing the circular economy’ was identified as a priority infrastructure theme, with the State Government seeking industry feedback in respect to the Discussion Paper.
VIC Government announces CDS commencement date: starting in Nov-23, the Victorian Government will offer a 10-cent refund for every eligible can, carton and button returned as part of the government’s container deposit scheme (CDS). The commencement of the scheme, which was last updated in Apr-23, represents another key step in Victoria’s transition towards a circular economy.
QLD announces expansion of Containers for Change program: the Queensland Government announced plans to expand the Containers for Change program in Apr-23. The recycling scheme will offer a 10-cent refund for glass wine and spirit bottles from Nov-23.
ACT commences consultation on the proposed expansion of the CDS: in May-23, the ACT Government announced plans to expand the list of items eligible, as part of the Container Deposit Scheme, for a 10-cent refund. The proposal supports a national agreement to expand and harmonise the scope of container deposit schemes by the end of 2025.
Tasmania releases State of the Industry Report: an independent report published by the Tasmanian Economic Regulator recognised the continued success of the Tasmanian Government in meeting its performance targets across water and sewage services in Jun-23. In particular, the state achieved 100% microbiological compliance of drinking water across 60 separate water systems and reused 96% of disposed biosolids.
TAS Government publishes draft Container Refund Scheme Regulations: the Tasmanian Government is currently seeking feedback on its Draft Container Refund Scheme Regulations 2023 to support the establishment of a state-wide recycling scheme. Inputs are sought to confirm which beverage containers are included in the scheme, price received per container and technical considerations related to container approval applications and drafting future guidelines.
General government
QLD Government budget announcements: the Queensland Government 2023-24 Budget was delivered in Jun-23. Key announcements included $1.2Bn allocated to new renewable energy and storage projects as well as investments in vital water infrastructure to secure the state’s water reliability, quality and sustainability.
VIC Government budget announcements: the Victorian Government 2023-24 Budget was delivered in May-23. The government announced a $1Bn commitment to bring back the State Electricity Commission, investments in additional renewable energy capacity and plans to upgrade the state’s water treatment capacity.
SA Government budget announcements: the South Australian Government 2023-24 Budget was delivered in Jun-23. Budgetary highlights included $2.5Bn for water projects such as the investment decision for the Northern Water Project; the implementation of the Hydrogen and Renewable Energy Act; amendments to solid waste charges; additional concessions under the Energy Bill Relief Plan.
WA Government budget announcements: the Western Australian Government 2023-24 Budget was delivered in May-23. Key announcements included $3Bn allocated to WA’s clean energy transition as well as upgrades to water infrastructure in strategic sites across Perth.
ACT Government budget announcements: the Australian Capital Territory Government 2023-24 Budget was delivered in June-23. Budgetary highlights included $133M new funding for climate action such as delivering the Big Canberra Battery project and the extension of the Sustainable Household Scheme; and a $98M community infrastructure package which includes new planned investments to improve the state’s stormwater network capacity.
Cwth Government budget announcements: the Federal Government Budget was delivered in May-23. Key announcements included the investment of $4Bn in renewable infrastructure, commitments to make Australia a leading hydrogen producer and funding to modernise Australia’s industrial manufacturing capabilities.
Projects and transactions
Projects and transactions updates from Q2 2023.
Towards net zero
QLD Government to invest $500M in renewable energy projects: in Jun-23 the Queensland Government announced plans to invest $500M in renewable energy projects via the publicly owned energy company, CleanCo. The funding commitments aim to increase energy capacity in regional Queensland, as well as promote construction jobs and help the state achieve its energy targets.
ACT Government announces Eku Energy partnership to deliver the next phase of the Big Canberra Battery Project: the Australian Capital Territory Government announced the partnership with Eku Energy to deliver the next phase of the Big Canberra Battery with a large-scale battery storage facility in Williamsdale (near the NSW border). The 250MW, 500MWh battery energy storage system is expected to store enough renewable energy to power one-third of Canberra for two hours during peak demand periods.
Octopus Australia acquires 400MW Hay Plains Wind Farm: Octopus Investments Australia confirmed the recent acquisition of the 400MW Hay Plains Wind Farm in May-23. The announcement expands the portfolio of Octopus Australia, increasing investments in Australian wind, solar and battery storage projects.
Sun Cable acquired by Grok Ventures: Grok Ventures acquired Sun Cable after winning a bid process run by FTI Consulting in May-23. The successful outcome for Grok Ventures followed the prior announcement of a $65M interim funding package to Sun Cable in Jan-23.
NZ Government commissions SAF production feasibility studies: in Jun-23 Air New Zealand and the New Zealand Government announced the preparation of two feasibility studies to assess operating a domestic sustainable aviation fuel production facility. Feasibility study details include:
Fulcrum BioEnergy, in partnership with Air BP, will investigate the use of non-recyclables and other items that go into landfill as a feedstock.
LanzaTech and LanzaJet, in partnership with Z Energy, will investigate the use of forestry residues as the feedstock and consider landfill waste as a supplementary feedstock.
HESTA announces green hydrogen investment agreement with ReNu Energy: HESTA and ReNu strengthened their relationship by converting a previously announced Term Sheet into a binding framework for co-investment, development and funding of green hydrogen projects in Jun-23. The agreement supports the development of a pipeline of potential projects to accelerate the transition to a low carbon future.
AEMO announces opening date for next generation and storage tender: AEMO Services announced the opening of a 950MW generation and 550MW long duration storage tender in May-23. The tender will award Long-Term Energy Service Agreements (LTESAs) to the preferred contractors, with the intent of reducing investment risk and would only be exercised during periods of unexpectedly low wholesale electricity prices.
CEFC invests $80M into the PEP Secure Assets Fund II: in May-23 CEFC announced an $80M equity investment in the Pacific Equity Partners Secure Assets Fund II (SAF II) . The PEP SAF II portfolio will target value-add mid-market infrastructure and infrastructure-like businesses, including assets with secure or contracted base cash flows in areas from healthcare and energy to transport and data centres.
AGIG reach financial close on the HyP Murray Valley development: Australian Gas Infrastructure Group announced financial close on its Hydrogen Park Murray Valley project in Jun-23.The 10 MW electrolyser project in Wodonga, Victoria is expected to receive a $36.1M commitment from ARENA and will support decarbonization objectives in the region.
Origin acquires interest in clean-tech company Allegro Energy: Origin acquired a 5% equity interest in the clean-tech company Allegro Energy in Jun-23, increasing its commitment to energy storage investments and developing alternative renewable technologies.
IGE enters into MoU with Samsung C&T to build Arrowsmith Hydrogen Plant: Infinite Green Energy (IGE) and Samsung C&T announced the execution of a Memorandum of Understanding to develop and build the Arrowsmith Hydrogen Plan. The parties are also partnering on the Northam MEG HP1 hydrogen project in Western Australia, which is under development.
NEOEN awarded 197MW capacity services contract: the Australian Energy Market Operator awarded a 197MW capacity services contract to the French independent renewables producer, Neoen. The decision will increase battery storage capacity in the southwest region of Western Australia.
Towards a circular economy
Unitywater announced $1.8Bn investment in water and wastewater services: Unitywater announced plans to invest up to $1.8Bn over the next five years to improve the reliability and quality of water in south-east Queensland in Jun-23. The investment supports the region's future development plans, particularly in the lead-up to the Olympics, with major projects consisting of pipes, pumps and treatment plants, as well as nature-based treatment and renewable energy initiatives.
QLD Government allocates $116M to support pre‑construction activities for the Paradise Dam Improvement Project: the Queensland Government allocated $116.4M in budget funds to support the pre-construction activities for the Paradise Dam Improvement Project, prior to major construction which is expected to commence in late 2024. The rebuild is expected to return the dam to its full capacity and deliver safe, reliable and secure water supply to the region.
Multiple bidders expected to bid for a 50% stake in LMS Energy: several infrastructure funds are reportedly competing for a 50% stake in LMS energy (LMS), the landfill gas business of Australian metal recycler, Sims Limited. The May-23 report follows the Q1 2023 announcement from Sims Limited that it was selling out of LMS after it was deemed non-core in a strategic review.
I Squared favoured in the sale of waste recycling business, Repurpose It: I Squared is reportedly the preferred bidder for the sale of industrial waste recycling business, Repurpose It. The Jun-23 report follows the Q1 2023 announcement from Downer EDI Limited that it would be divesting its 45% shareholding in the Melbourne-based recycling company.
CEFC invests $75M in Pinkenba C&D Facility: Clean Energy Finance Corporation announced the allocation of $75M in debt financing to develop Rino Recycling’s Pinkenba recovery centre in Brisbane. The centre will be expected to process more than 1 million tonnes per annum of concrete, excavation and skip bin waste.
Sydney Water awards $150M contract for WRP upgrade: Sydney Water awarded BMD Construction a contract worth $150M to deliver major upgrades to the Richmond Water Recycling Plant in Jun-23. The infrastructure upgrades are expected to double plant capacity and play a critical role in meeting the needs of Richmond’s growing population.
ACT NoWaste releases MRF early tender notification: the Australia Capital Territory Government released an Early Tender Notification in May-23 for the finance, design, construction, operations and maintenance of a new Materials Recovery Facility (MRF) for the Territory. The MRF is being procured separately to a Food Organics and Waste Organics facility, with both assets expected to be operational by 2026.
ARENA invests $30M in SAF production: the Australian Renewable Energy Agency allocated $30M in funding to support development of a domestic sustainable aviation fuel production from agricultural feedstocks. Announced in Jun-23, the investment will fund engineering studies and pilot programs across regional Australia to accelerate the decarbonisation of the aviation industry and reduce emissions.
NT Government announces development of sustainable development precinct: the Northern Territory announced the next step in developing the Middle Arm Sustainable Development Precinct, with the government issuing ‘not to deal’ commitments to five proponents over specific parcels of land at the precinct. The commitments, announced in Jun-23, mean that the preferred sites will be set aside for up to 12 months. Proponents include: TEH2 (100% owned by Total Eren) - renewable energy; Fortescue Future Industries - renewable energy; Tivan - critical minerals; Tamboran Resources Limited - natural gas; Avenira - critical minerals.
Sustainability Victoria announces bioenergy grant funding recipients: successful grant recipients of Sustainability Victoria’s $10M Waste to Energy Fund: Bioenergy were announced in Jun-23. A total of 24 recipients were announced, with the funded projects expected to increase renewable energy generation across Victoria.
NSW Government announces Dungowan Dam project will not proceed: the New South Wales Government will not proceed with the Dungowan Dam project after the Federal Government withdrew funding and concerns were raised about the project’s cost-benefit ratio. Announced in May-23, cancelling the project is expected to save taxpayers $632M and enable the government to explore alternate options to improve water security for the region.
YVW announces new Delivery Partners for Pipes and Facilities program: Yarra Valley Water (YVW) announced the execution of a partnership with Jaydo, Aqua Metro and MFJ Constructions to deliver its Pipes and Facilities Program in May-23. The program partners will support YVW’s construction projects across its water, non-drinking water and sewer pipes and facilities capital program. The initial term is for five years, with the possibility for an extension for up to ten years.
Sphere at a glance
Sphere updates from Q2 2023.
Sphere welcomes Ken Baumli to the team: we are pleased to welcome Ken Baumli to Sphere as an Associate in our Sydney office. Ken will leverage his data analytics, commercial management and industry experience from across Australia, Denmark and Switzerland to support Sphere’s clients transition to a circular economy. Welcome Ken!
Kate Dryden will chair AORA’s Sydney Networking Breakfast: on 26-Jul, Kate Dryden will facilitate the Australian Organics Recycling Association’s (AORA’s) annual Sydney Networking Breakfast at the Crowne Plaza, Darling Harbour. An exciting speaker line-up will detail opportunities for the organics sector to secure additional investment and community support as part of the transition towards a circular economy and cross-industry insights from Australia's path towards net zero. Tickets can still be purchased via AORA’s website (here).