New money for the Clean Energy Finance Corporation will go to projects such as pumped hydro, batteries and gas

This article is more than 10 months old

This article is more than 10 months old

An extra $1bn is being handed to the Clean Energy Finance Corporation to invest in projects aimed at ensuring a reliable electricity supply.

The new fund – separate to the corporation’s existing capital – will be earmarked for power generation, storage and transmission projects such as pumped hydro, batteries and gas.

Eleven of the 12 new generation investments shortlisted for the Coalition’s energy underwriting program are also eligible for funding, although Guardian Australia has confirmed that both new coal power stations and coal power upgrades will be ineligible.

The underwriting program shortlist includes a proposed upgrade to an existing coal-fired power station in NSW’s Lake Macquarie put forward by coal baron and LNP donor, Trevor St Baker.

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The new money ties in with an investment mandate given to CEFC late last year to focus on grid stabilising technology.

Malcolm Turnbull (@TurnbullMalcolm) Key factor will be (1) zero emissions electricity, deliverable by renewables plus storage including pumped hydro PLUS (2) electrification of the economy esp transport, heating, cooling. More transmission vital, so good to see recent announcements, much more needed. 2/2

The bid to boost the CEFC comes after the Morrison government quietly appointed an expert panel to come up with new ways to cut greenhouse gas emissions by reforming the $2.55bn emissions reduction fund.

Announcing the fund on Wednesday, energy minister Angus Taylor said it would help to balance the influx of renewable energy projects.

“It is no secret that the national electricity market is under pressure – this fund is designed to tackle that,” he said in a statement.

The other shortlisted projects are six pumped hydro power stations and five gas.

The Morrison government announced the underwriting plan ahead of the May election, without knowing how it would work.

Correspondence on the project obtained through freedom of information shows the CEFC was contacted after the election for advice on how to deal with “program design issues”.

In 2015 the Abbott government tried to abolish the CEFC, then banned it from investing in certain wind and solar projects when the Senate resisted abolition.