Positive news for the manufacturing industry in the Federal Budget was the re-profiling of funding for the popular Clean Technology Investment Program (CTIP), which provides funds to support the implementation of energy efficiency projects in Australian businesses.
The change provides no new funding, but brings forward $160 million to the 2014-15 financial year. Although this may reflect the funding demands of projects already approved, Energetics sees further incentive for large energy users to assess their energy use and pursue opportunities to reduce it.
The popular programs, General CTIP and the Clean Technology Food and Foundries Investment Program (CTFFIP) are seen to offer significant cost reduction opportunities for manufacturing.
Energetics’ analysis of CTIP/ CTFFIP to date
100 grants worth over $100 million have been awarded under the general CTIP, while 132 grants worth more than $72 million have gone to food and foundry businesses under their specific program. The Minister for Climate Change, Industry and Innovation released a map showing the range of projects supported by Clean Energy Future grant programs.
With grants averaging $653,455 in the General CTIP (up from $515, 077 in our last analysis in March) and $550, 306 (up from $451,277 in March) in CTFFIP, the contribution this “free money” can make to a project’s business case is substantial, particularly if the company qualifies for 1:1 funding.
At this stage Energetics recommends that only those projects that can be quickly scoped and developed, such as lighting upgrades or solar PV, should apply and do so by the end of this month, in time for the Program’s July assessments. Energetics can assist.
Project types receiving grant funding
Projects which increase business productivity must also demonstrate appropriate levels of energy and carbon savings to meet AusIndustry’s requirements.
That the grants awarded to date have kept to those principles is no surprise. Across both programs we see successful projects which develop renewable energy sources. In the general CTIP program, 20% of projects involve renewables, with 42% in CTFFIP.
For small manufacturers there is a lot of interest – and success – in obtaining grants for solar PV installations under 100kW. These projects are particularly attractive because they are small, qualify for 1:1 funding, costs are further offset with Small-scale Technology Certificates (STC) and the site’s sustainability credentials can be considerably enhanced.
However, in determining what will lower the energy intensity of a manufacturer’s operations there are two points to note. Firstly, while we’re seeing a strong focus on traditional energy projects (high efficiency technology replacements such as high efficiency motors, VSDs, energy efficient lighting), there’s also a large proportion of spending on projects focussed on process improvements, especially in the general CTIP program at 49% of grants awarded. Many businesses have been able to identify and find a way to successfully demonstrate the energy savings of these projects and qualify for substantial grant funds. The largest grant to date is $9.1 million.
In the food and foundries program we also see a high level of interest in process improvements with 22% of grants awarded to such projects and a further 21% designated for process heating projects.
View the charts from the link below, which provide a breakdown of the technology types awarded grants across the two funding programs. This information is derived from the descriptions published by AusIndustry on their website for the respective grant award recipients, and is therefore limited. However, based on our experience and knowledge of the types of businesses receiving grants and their operations, we have made our own assessment as to the project elements and the most appropriate allocation.