Labor has announced an extra $206 million of funds to encourage the development of solar towers and storage arrays as part of a plan to further boost the role of the Clean Energy Finance Corporation and the Australian Renewable Energy Agency.
The plan, unveiled in Labor’s climate and clean energy strategy released on Wednesday, is focused on restoring the role played by the two key institutions that have been targeted by the Coalition government.
Labor says it will remove the restrictions on investing placed on the CEFC, and it will protect ARENA – which the Coalition wants to strip of $1.3 billion in legislated funding – and give it more powers and encouragement to push into new technologies.
The money set aside for solar towers is encouraging, particularly those in towns like Port Augusta where the last coal fired power station is due to be retired, and where solar towers with storage, and the ability to provide flexible generation, is seen as a great opportunity.
“This is the next frontier in lage scale renewable energy,” environment spokesman Mark Butler told ABC Radio National on Wednesday morning. Several international and local companies have proposed solar tower technology for Australia, including US company SolarReserve, for a 110MW solar tower just north of Port Augusta.
The Coalition has also cited potential support for a solar tower plant in Port Augusta, but it is conditional on the creation of a new fund, called the Clean Energy Innovation Fund, which is taking money from the CEFC, and removing the $1.3 billion from ARENA and its grant funding mechanism.
This was widely criticised, including by former ARENA chairman Greg Bourne, who said it removed a key support along the innovation chain for emerging technologies.
“We will restore a functioning market that has been demolished by Tony Abbott and Malcolm Turnbull, and partner with our scientists and inventors to support new ideas and technologies,” Labor said in its policy announcement.
It said ARENA had been highly successful, supporting 232 projects, and Labor would seek to provide “greater certainty, more flexibility and support throughout the innovation chain and the project life cycle.”
This would include research and development, seed, early stage (start-up), formative (pre-commercial), commercial, refinancing, and in investments that support the orderly exit and rehabilitation of older, polluted power plants.
“Consistent with the Government’s continued attacks on the renewable energy industry, the Government’s cuts to ARENA have left it without the capacity to provide grant funding to support the next big idea, the next renewable energy technology,” the document says.
“Grant funding is important in that it can provide the necessary capital buffer that enables a project to secure debt finance. Labor supports the need for increased co-investment in projects, but the Government’s approach has created a gap in the development cycle, cutting support for pre-investment ready projects.”
It says that the there will be an additional $206.6 million set aside over four years for a “specific Concentrated Solar Thermal round.” Presumably, this would be in similar format to the current solar funding round of $100 million being conducted by ARENA for solar PV. That attracted interest from more than 70 projects.
On the CEFC, Labor said it will broaden its investment mandate to make it “technology neutral”, reduce red tape and re-establish “realistic benchmark returns”.
This is based on analysis done by the CEFC which said that the high return and tighter risk profiles proposed by the Coalition would restrict their investment possibilities.
Lisa Lumsden, the spokesperson for Repower Port Augusta, welcomed the focus on solar thermal funding.
She also welcomed Labor’s proposal for an inquiry into creating a closure plan for Australia’s dirtiest coal burning power stations and to support workers and communities for a just transition beyond coal.
Lumsden noted that this came as the last coal train from the Leigh Creek brown coal mine was due to roll into Port Augusta on Wednesday, to feed the Northern power station which is due to close within a few weeks.
“The ALP’s inquiry into creating a plan for the orderly and planned closure of coal burning power stations is a positive step forward and it would prevent the community impacts of unplanned closure like we saw in Port Augusta.”