Financing the Energy Transition - Faster, Fairer, Smarter 

Australia Needs A Scheme Finance Vehicle (SFV) 

Australia’s energy transition is well underway. But the pathway is getting messier - and more expensive - than it needs to be. 

Coal plants are ageing and exiting faster than new renewables can be built.  

Gas prices remain high and volatile.  

And the private market, facing deep uncertainty, is struggling to provide the long-term, fixed-price power contracts that big industrial users depend on. 

This isn’t a failure of renewables. It’s a failure of finance. 

The real problem: high cost of capital, not lack of technology 

Renewable energy is now the cheapest form of new power - if you can finance it affordably. But because renewable projects are capital-intensive, most of their cost is tied up in finance, not fuel.

When the cost of capital (WACC) rises by just 1%, the price of renewable power typically rises by about 10%. 

That means financial risk, not engineering cost, is now the main driver of Australia’s power prices. 

Private developers face these risks project by project, and without investment-grade counterparties they must charge higher prices to compensate.  

This creates a vicious cycle: higher perceived risk → higher financing cost → higher power prices → slower investment. 

The SFV: a structural fix for a structural problem 

A Scheme Finance Vehicle is a new kind of public-private financing tool designed to break that cycle. 

Instead of offering cash subsidies or taking ownership stakes, government lends its balance-sheet credibility to clean energy projects by standing as a high-credit counterparty - buying power from renewable developers and on-selling it to large industrial users under long-term, fixed-price contracts. 

By de-risking projects at the source, the SFV lowers financing costs across the board. 
A 1–2% reduction in the Weighted Average Cost of Capital (WACC) translates into 10-20% cheaper renewable power - without ongoing subsidies or fiscal exposure. 

In short: The SFV lowers the cost of clean energy by lowering the cost of finance. 

Why this matters 

  • Secure power for industry: Smelters, refineries, data centres and manufacturers can lock in 15–20-year renewable contracts that are bankable, affordable and firmed. 

  • Accelerate renewable build-out: Developers gain the confidence to invest sooner and at scale. 

  • Protect taxpayers: The SFV is a contractual mechanism — not a grant or bailout — with all support repayable over time. 

  • Strengthen the grid: Long-tenor industrial demand anchors new generation and transmission investment. 

  • Advance national goals: The SFV directly supports the Future Made in Australia agenda, delivering sovereign capability, green jobs and emissions cuts. 

A model ready to deploy 

The Tomago SFV proposal in New South Wales has demonstrated the logic and the mechanics: use government credit to de-risk renewable projects, cut the WACC, and deliver affordable, firmed, zero-carbon power to one of the country’s largest industrial users. 

Now, this approach can be scaled nationally - through structures like Snowy Hydro Industrial Power Solutions (SHIPS) -  to serve green-iron producers, data centres and future clean-manufacturing hubs. 

A smarter way to build the future 

The SFV is not a subsidy, a bailout, or a new bureaucracy. 

It is a disciplined financial innovation - a market fix that aligns public credibility with private investment to deliver clean power faster and cheaper. 

By addressing the core problem - the cost of capital - the SFV provides the missing financial architecture for an orderly, affordable energy transition that works for households, industry and the planet. 

In the Media

Middle Aged Man with Glasses speaking to an interviewer on a TV News Program

Oliver Yates, Chair of the Expert Advisory Board of the GES Project.