Project and technology types receiving CTIP grants

Project and technology types receiving CTIP grants
25 Mar 2013Archived News Roger Horwood Climate Change Matters

Several rounds of grant assessments and awards have been announced for both the general $800m Clean Technology Investment Program (CTIP) and its smaller food and foundries arm worth $200m (Clean Technology Food and Foundries Investment Program – CTFFIP). 

Since end February, 80 grants worth over $42 million have been awarded under the general CTIP, while 99 grants worth more than $44 million have gone to food and foundry businesses under their specific program.
 

 

Digging deeper, Energetics has considered the technology types that are receiving the greatest share of the grants programs. In this article we share our findings which may provide additional and helpful insights for companies seeking to access this large pool of funding ahead of the September federal election.

The time to lodge your CTIP application gets shorter and shorter

In our previous newsletter we recommended that applications need to be submitted by end May.  However, recent intelligence from Ausindustry has led us to revise our recommendation - efforts should be made to submit applications by early May given the backlog and increased number of applications awaiting assessment.

To be successful, you need an application that unambiguously meets the CTIP criteria: achieving appropriate reductions in both energy and carbon intensity for your selected technology type and business sector.  AusIndustry is focussed on funding projects that directly lead to energy savings and reductions in carbon emissions.  They will reject efforts to seek funding for large or small CAPEX projects that cannot demonstrate such outcomes.

With grants averaging $515,077 in the General CTIP and $451,277 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.  Remembering too, that these grants are all the more attractive because the funding supports projects that deliver long term savings for your business. 
 

Project types receiving grant funding

As mentioned previously, projects which increase productivity must also demonstrate appropriate levels of energy and carbon savings to meet AusIndustry requirements. 

That the grants awarded to date have kept to those principles is no surprise and certainly across both programs we see projects which develop renewable energy sources succeeding – in the general CTIP program, 18% of projects involve renewables, with 32% in CTFFIP.

Wineries winning grants nationwide clearly demonstrate this with about a dozen successful for projects which improve sustainability credentials while reducing the carbon intensity of their business.

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. 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.

This is the particular attraction in obtaining CTIP funding: reducing capital requirement and thus project paybacks for large and small projects alike, for projects that have previously not met required investment hurdles.

The charts below provide a breakdown of the technology types being 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.
 

The following descriptions provide examples of the large process upgrade projects and grants in each category.

CTIP

Dongwha Timbers, NSW– $8,208,667 grant

Dongwha Timbers will invest in energy efficient equipment and technology to replace existing carbon intensive machines and upgrade the site to a more environmentally sustainable standard. The company's two operating sites in Victoria and New South Wales will be consolidated into a single site at the Bombala sawmill facility in New South Wales.

This project is expected to reduce Dongwha Timbers' site-wide carbon emissions intensity by 35%.

CTFFIP

Devro Pty Ltd, NSW – $1,000,000 grant

Through this project, Devro will install a new flatbed wet systems and multi-pass dryers and change from online to offline shirring. The project will upgrade three production lines, resulting in energy savings and increased productivity.

The project is expected to reduce Devro’s site-wide carbon emissions intensity by 13%.

Looking across the list and descriptions of grant recipients and their projects, the process improvements tend to focus on the upgrading or modernising of equipment that is specific to the business and the products it manufactures, such as presses, forging machines, production lines, as opposed to refrigeration upgrades, improvements to electrical systems or the introduction of renewable energy sources which relate more to the business’ facilities and general operating costs. 
For more advice on the development of your CTIP application to make sure it delivers significant improvements in energy and carbon intensity, please contact one of our experts.

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