The Australian Renewable Energy Agency has made a new case for an expansion to its funding, releasing an assessment of the benefits from its investments in renewable technologies have delivered to the Australian economy.
ARENA faces an uncertain future, with its government-allocated funding expected to be exhausted within the next year. But an EY report commissioned to evaluate the agency’s success has found that it has been highly effective at attracting private sector investment, creating jobs and supporting research.
ARENA, was formed in 2012 and provides grant funding to renewable energy research and development. It has played a crucial role in the emergence of Australia’s renewables sector, particularly a now cost-competitive large-scale solar industry.
According to the analysis completed by EY, since its foundation ARENA has generated an enormous $7 billion worth of investment in clean energy technologies and projects, successfully leveraging $3.4 per $1 of matched investment from the $1.59 billion in funding provided by ARENA to more than 500 projects.
EY found that the support provided by ARENA has played a crucial role in supporting Australia’s clean energy sector to mature, and has helped the sector grow to a point where it is contributing substantially to reducing Australia’s emissions.
“ARENA’s R&D investment has significantly improved the cost and performance of solar PV. Its demonstrations and feasibility study projects have supported emerging technologies to move towards commercial readiness more quickly and develop enabling technologies that will support renewables to integrate into the grid in a way that improves reliability and maintains system security,” the EY report says.
“Critically, ARENA has contributed to reducing the cost of renewable energy, supporting an increase in the supply of renewable energy and a reduction in energy related emissions.”
ARENA is approaching the end of its initial funding allocation, with no new funds set to be provided to the agency beyond the 2021/22 financial year, and could see research funding for clean energy technologies largely dry up.
There have been growing calls from the clean energy sector for ARENA’s funding to be extended – it currently holds around $100 million of unallocated funds – and progressive think tank The Australia Institute has argued that funding should be topped up by the Morrison government.
It is understood that the Morrison government is considering an extension of the agency’s funding, which may come paired with changes to its funding remit to put a greater emphasis on dispatchable power.
These plans, along with larger parts of the Morrison government’s energy policies, are in limbo, as legislative amendments needed to implement them are stalled by a Covid-19 triggered suspension of parliament.
Considering ARENA’s success has been in supporting energy sector investment and innovation, both outcomes the Morrison government claims to prioritise, it should be a straight forward decision.
The Australia Institute pointed to the number of times coalition ministers had praised the agency, happily taking credit for its achievements.
But given the Coalition government has sought to abolish ARENA at times, nothing is certain.
In findings that could even appeal to some of the staunchest anti-renewables backbenchers within the government’s ranks, the evaluation of ARENA’s performance found that it delivered hugely positive benefits to regional communities.
The assessment completed by EY has emphasised the benefits that ARENA’s funding has delivered to these communities, including parts of Northern Queensland, where local parliamentarians have been lobbying for new coal-fired power stations.
EY estimated the economic benefits that ARENA’s funding had brought to both central and north Queensland, as well as Central West NSW, totalling hundreds of jobs and millions of dollars in investment.
In Central and North QLD, EY estimates that ARENA supported projects contributed $272.6M to the region’s economy, with the projects expected to create almost 400 additional full-time jobs.
The impact in Central NSW was similar, with ARENA generating more than $254 million in new economic activity and supporting employment in 339 additional positions in the region.
ARENA has supported hundreds of research projects, providing almost $300 million in funding across almost 200 projects, underpinning advances in solar energy technologies at world-leading institutions like the University of New South Wales and the CSIRO.
ARENA has also committed more than $1.2 billion in demonstration projects, including 1.5GW of new grid-connected solar farms across Australia, almost single-handedly kick-starting the industry in Australia.
“ARENA’s funding support for renewable technologies across the research and development, demonstration, and deployment stages of the innovation chain, has been critical to achieving the agency’s mandated objectives, intended outcomes and led to broader impacts on the Australian energy sector and broader economy,” the EY report found.
“ARENA has been able to, and will continue to, achieve these outcomes by providing financial support, stimulating private sector investment, supporting industry to grow and building its capacity, and reduce the costs of renewable energy technologies.”
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