The 2014 Federal Budget: Are CEEP Projects Safe?

Alexi Lynch

Thirty-nine Victorian councils were successful in applying for street lighting project funding through round two of the Community Energy Efficiency Program (CEEP), which was announced mid-2013. This is on top of the eleven councils in round one of CEEP. Since then there have been four changes in government departments administering CEEP, as well as a change in the number of funding rounds through the 2013 Budget and a change of government.

When the Federal Budget was released a few weeks ago there were more questions asked around council energy efficiency and renewable energy projects under the Federal Government. We’ve written a detailed summary of Direct Action, the Emissions Reduction Fund and the Budget and how councils may be able to get involved in the future. But as for current funding sources, would they be safe?

There are a handful of small groups that have been trying to delay or stop energy efficient projects through on-going scare campaigns. They are generally based on misinformed reading of Federal funding agreements and demonstrate a lack of understanding of regulatory frameworks, national electricity laws and how councils operate. One recent example was direct letters to councils stating that it they gift lights to distributors they are breeching funding agreements. This was, of course, well off the mark. Another tactic is to lobby Mr Hunt and other federal politicians to cut funding, as well as taking to social media to publicly deride councils that implement energy efficiency projects. So we weren't surprised when a few councils rang us last week saying that they had been "contacted by the usual suspects" and told that CEEP funding was at risk.

So are CEEP funded projects safe?

Yes. 

If councils are working within and abiding by funding agreements then you have absolutely nothing to worry about. The contracts are signed and the money has been allocated. 

In fact, not only is CEEP street lighting funding safe, at the MAV Environment Conference in May 2014 Minister Hunt made it clear that large street lighting projects are exactly the sorts of projects that could attract funding under the Direct Action Emissions Reduction Fund (ERF). At the conference he urged local government to put in proposals to the ERF reverse-action process because “councils can be faster to the market than other entities”, specifically pointing to street lighting and buildings. He also discussed the importance of aggregation of emissions, which we discuss in great detail here.

In addition to the ERF, there are other funding sources out there. Over the last 6 months we've been contacted by a number of financing institutions and banks who are very keen on financing street lighting projects given the guaranteed electricity savings, high Net Present Value (NPV) and short payback periods. Quite simply, there is no longer a financial barrier for any council that wants to follow the lead of the 80% of Victorian councils that have begun - and in some cases finished - implementing energy efficiency projects.

There are tens of millions of dollars wrapped up in street lighting projects around Victoria so expect scare tactics around energy efficiency projects to continue!

However we also know that councils will carry on implementing these flagship projects. Every completed street lighting project has been a great success and all the projects we're working on are moving forward. New efficiency lights are being installed. Councils are saving millions in electricity and maintenance costs.  

So what now?

Our advice: meet your deadlines, communicate frequently with the funders (especially if there are changes to your baselines), ignore vested interests and remember we’re only ever a phone call away