Industry joins call for ARENA funding extension, as Taylor ducks commitment

The Clean Energy Council has added to calls for funding to be extended to the Australian Renewable Energy Agency, saying that further support is crucial to help accelerate Australia’s emergence as a “renewable energy superpower”.

The peak body for Australia’s clean energy sector said that ARENA has a played a pivotal role in the emergence of large-scale solar and battery storage projects, and it was crucial the federal government allocated additional funding, with ARENA set to exhaust its available funds sometime later in the year.

“A big technology vision requires a strong innovation capability. We have seen first-hand the incredible impact ARENA had on large-scale solar by supporting the industry in its infancy and accelerating the cost reductions in these major capital investments,” Clean Energy Council CEO Kane Thornton said.

“That investment by the Australian Government is now paying off handsomely, with large-scale solar delivering the lowest cost electricity of any energy source in the country.”

The Clean Energy Council called on the Morrison government to extend ARENA’s funding for at least another decade and to provide an additional $2 billion in funds to support the energy sector to undertake further research, deployment and demonstration projects.

If any additional funding is provided to ARENA, it is likely to be announced in the lead up to the next federal budget, scheduled for May.

Recently, ARENA has made a big push into supporting new renewable hydrogen projects, which will likely attract additional focus following an announcement from federal energy and emissions reduction minister Angus Taylor that hydrogen is set to become a key focus of a ‘technology roadmap’ currently being developed by the federal government.

It is also supporting a pumped hydro plant in South Australia, with negotiations with the preferred bidder continuing, and numerous smaller-scale projects such as virtual power plants and an extension to the Hornsdale big battery.

“Hydrogen presents Australia with an opportunity to become a clean energy superpower – shipping its low-cost sunshine and wind power across the world and creating a new zero-emissions export industry,” Thornton added.

“But early stage projects face considerable commercial risks and many will never get off the ground without collaboration and support from the Australian Government. The next five years are critical for Australia to demonstrate early progress and stake its claim as a leading clean hydrogen exporter.”

Energy minister Taylor was non-committal about providing additional funding to ARENA when asked about it on Friday, but praised the work of the agency.

“ARENA has funding through to 2022 and they’re playing an enormously important role in those early stage investments,” Taylor said during a press conference in Sydney. “They’re investing in dispatchable generation projects. They’re investing in pilot projects in hydrogen. They are playing a very, very, very important role.”

“As is the CFEC, the CSIRO, as are universities and the [Co-operative Research Centres]. There is a really broad collaborative effort here in R&D and early deployment of these technologies and we have a philosophy of ‘get these technologies to a point where they’re not going to destroy jobs, they’re going to support a strong economy, and then step back and let the private sector follow.”

ARENA representatives told a senate estimates hearing in December that the agency had just $200 million in unallocated funding and expected to exhaust its funding by the middle of this year without further funding.

ARENA will continue to provide already allocated funding under its existing project arrangements, it will not be able to support new projects, such as further hydrogen projects, once the funding is fully allocated.

“ARENA has a $70 million renewable hydrogen funding program underway, but without further funding, all this investment will come to a grinding halt as the agency begins to ramp down ahead of its 2022 end date,” Thornton added.

The Clean Energy Council’s call for additional ARENA funding follows similar calls from the Australia Institute, which noted that the coalition government had praised the agency more than 150 times over the last six years.

The Australian Senate also backed a Greens motion earlier in February, which also called on the government to commit additional funding to the agency.