An article from Shane Sykes, RAMJO Regional Energy and Sustainability Project Manager, responsible for our JONZA Project.
A Revolving Energy Fund is a self-sustaining funding mechanism, which you start with seed capital that you can then invest in sustainability projects, such as energy efficiency, water conservation, or solar projects. A unique feature of the fund is that you return savings from sustainability projects back into the REF to finance the next round of investments. In this way, you can spend funds multiple times to drive emissions reduction, resource and cost savings.
The three benefits of a Revolving energy fund are:
- Easier to finance projects, as the funds are already there and can represent the co-contribution of a grant or even the full cost of a project.
- Can facilitate faster implementation of projects as the funding is already there to undertake activities, no need for budget variations.
- Responds to the increasing demands of climate regulations, as the fund grows councils can take on more projects or larger projects, achieving a greater impact.
How Revolving Energy Funds operate:
A renewable energy fund will need seed capital. Seed funding can come from savings realized from earlier projects such as converting to LED streetlights, energy load shifting to when energy prices are cheaper e.g. off peak rates. How much a council injects initially may depend on how much of the savings your council can afford to direct into the seed fund, the number and size of opportunities in your climate action strategy, along with other factors. However, the more money that can be put into the fund, the more projects or the bigger the projects councils can fund, and the more self-sustaining the financing cycle will be.
Find out more about Revolving Energy Funds at Revolving Energy Funds – why you need one and using an Excel tool to model the outcome [with video] – 100% Renewables (100percentrenewables.com.au)