The Renewable Energy Future Fund, which complements the country’s 20 percent target of renewables in its energy mix, will help deploy large- and small-scale renewable energy projects in geothermal, solar power and wave energy.

It also seeks to help households, commercial establishments and industries reduce electricity consumption through energy efficiency measures throughout its four-year rollout.

The fund will form part of the government’s expanded 5.1 billion Australian dollar Clean Energy Initiative, which includes 2 billion Australian dollars for carbon capture and storage projects and 1.5 billion for flagship solar projects.

Australia’s Ministry for Resources and Energy said the newly allocated funding will shore up the government’s investment in clean energy to more than 10 billion Australian dollars. It noted that details of the funding will be disclosed soon.

Australia deferred plans for an ambitious carbon emissions trading scheme after it met strong opposition in parliament. Prime Minister Kevin Rudd said they would wait until after the Kyoto Protocol expires in 2010 before pursuing the plan.

The ministry said the funding became available as a result of the deferral of the carbon scheme, as well as from existing funds from the Ministry of Climate Change and Energy Efficiency.

Reuters reported that as much as 2.5 billion Australian dollars could be freed up from the 2010 to 2011 national budget due to the deferral.

Meanwhile, some clean energy players welcomed the fund, saying it is a demonstration of a more sophisticated strategy to develop the country’s clean technology industry.

“Australia has genuine potential to pioneer new affordable and innovative ways of generating clean energy,” said Matthew Warren, chief executive of the Clean Energy Council, an industry association made up of over 350 companies.

“If we want to be a smart clean tech innovator then the companies developing these technologies need the capital to fast track their projects and show us what they can do,” he said.

Mr. Warren said significant technological breakthroughs should not be delayed just because they were starved of investment, especially since innovations hinge on a process of trial and error.

The Australian state of Tasmania echoed sentiments of the fund’s urgency.

“How we deal with energy issues is central to Tasmania’s economic future, environment and the welfare of all Tasmanians,” said Nick McKim, the state’s minister for sustainable transport and alternative energy.