Clean energy opportunities for local governments

This June 2016 market report from the Clean Energy Finance Corporation provides a brief guide to clean energy investment opportunities for Australian councils and sets out how the CEFC Local Government Finance Program can help councils invest to reduce energy costs and lower carbon emissions.

Australia’s 560 councils support communities by providing important infrastructure and services. In fact, councils are one of the country’s major providers of infrastructure, and together are responsible for more than $380 billion of fixed assets and land. All of the buildings and facilities that councils own and manage consume energy, either directly or through maintenance, and energy costs are a significant part of council budgets. Investing in clean energy provides an opportunity for councils to renew their infrastructure, save energy costs and meet sustainability objectives. There are a number of ways that councils can invest in clean energy.

• An increasing number of councils are generating renewable energy locally – for example, by installing rooftop solar PV on council facilities – to help meet their electricity needs. Generating onsite renewable energy can reduce council operating costs by reducing the need for grid electricity as well as reducing carbon emissions.

• Improving the energy efficiency of council facilities and services – for example, by upgrading to LED streetlights, improving the energy efficiency of council buildings and switching to low carbon vehicles, which are all effective ways to reduce costs and carbon emissions.

Councils hold large asset portfolios with long operating lives and generally have relatively stable cashflows. Despite the fact that many councils have large infrastructure investment tasks and a strong capacity to service debt, the local government sector as a whole makes relatively little use of debt.

A sustainable level of borrowing can support investment in high-quality clean energy infrastructure while sharing the costs over time with the beneficiaries – current and future residents. Clean energy investments can bring a range of benefits in addition to lower costs and carbon emissions, including energy independence, reduced environmental impact, improved community engagement and better places for council employees and customers.

The Clean Energy Finance Corporation is offering tailored finance for Australian councils to invest in clean energy, reduce costs and lower carbon emissions. The CEFC’s Local Government Finance Program is designed to provide flexible and competitive fixed-rate long-term finance tailored to the needs of Australian councils.