New $100 million program to unlock ‘missing middle’ of renewable energy shift

Federal government investment fund the Clean Energy Finance Corporation (CEFC) has tipped $100 million (USD 70 million) into Canberra-based renewables financing firm Infradebt to fast-track the development of distribution-connected renewable energy generation and battery storage projects across Australia.

The CEFC said the funding will be made available through the Distribution Connected Accelerator Program (DCAP), with Infradebt to establish the program through a competitive process to shortlist prospective proponents.

The initiative is to support a pipeline of distribution-connected projects to be ready to commence construction in 2027. Eligible projects include solar and battery hybrid projects, standalone batteries, and battery retrofits to existing solar projects​. The program will target projects up to 5 MW but also has capacity to support larger projects.

CEFC Chief Investment Officer Monique Miller said the initiative will help address the gap between rooftop solar and large-scale renewable developments and will focus on distribution-connected projects that can connect faster by leveraging existing network capacity, avoiding transmission bottlenecks that can delay larger-scale developments.

“Mid-scale renewables are a powerful lever in unlocking Australia’s renewable energy future and are often referred to as the ‘missing middle’ between individual rooftop solar and utility-scale renewables,” she said, adding the DCAP will reduce finance barriers for the small and mid-scale projects by providing concessional senior debt financing.

“Smaller, ready-to-connect wholesale generation projects can face barriers due to size and transaction costs,” she said.

“By providing targeted capital and certainty and efficiency of process, CEFC finance is helping to unlock a constrained segment of the market while supporting a more resilient energy system and utilising latent capacity in distribution networks.”

Infradebt, which has financed more than 80 infrastructure projects, including over 40 distribution-connected renewable energy projects since its 2014 launch, will establish the DCAP through a competitive process. It is expected successful projects will be ready to commence construction in 2027.

Alexander Austin, Chief Executive Officer at Infradebt, said the new program will create a financing pathway for distributed energy projects, supporting them to reach operations and accelerate Australia’s energy transition.

“Australia’s energy transition will not be delivered through a handful of mega-projects alone,” he said. “Smaller, distribution-connected projects have a critical role to play because they can often move from development to operation significantly faster.”