Revealed: Energy lobby group, Rio Tinto to receive ARENA grants

The federal Coalition government appears to have inadvertently revealed the Australian Renewable Energy Agency (ARENA), which it is seeking to push into carbon capture and storage and other technologies, is also providing grants to a major energy sector lobby group and resources giant Rio Tinto.

The details of these grants were revealed in a letter from federal energy and emissions reduction minister Angus Taylor to the president of the Senate Scott Ryan, and released publicly via the parliament house website on Tuesday.

Federal ministers are required to publish a list of appointments and grants awarded ahead of each session of Senate estimates hearings. The next round of ‘estimates’ is scheduled for next week, following the recent handing down of the federal budget, and the latest lists provide insight into what grants have been awarded by government agencies in the last few months.

This includes ARENA, which according to the latest disclosure has awarded a total of seven new grants, worth a total of $79.1 million, since February. It is understood that several of these grants were not yet ready to be announced publicly.

The largest on the list is a $47 million grant provided by ARENA to the Kidston pumped hydro energy storage project, being developed by Genex in Northern Queensland – a grant that had been publicly announced in March as part of Genex’s moves to secure finance for the landmark project.

The list also includes a previously flagged $12.1 million grant to the CopperString project (through its parent entity CuString Pty Ltd), intended to support the Queensland transmission infrastructure project progress to a final investment decision.

The high-tech concentrating solar technology company Raygen appears to have secured $15 million in funding from ARENA for an as yet unknown project. The company received a $3 million grant from ARENA in 2020 to support the development of an innovative solar and hydro hybrid facility in Victoria, in partnership with AGL Energy.

Raygen recently announced that it secured a $3 million equity investment from Amsterdam-based solar project developer Photon to progress the solar-hydro project towards a large scale deployment, and it appears likely that a fresh injection of $15 million worth of grant funding from ARENA will likewise accelerate that work – but the details have not yet been formally released.

But the list also features a $164,550 grant to the Australian Energy Council, a leading lobby group that represents large energy market incumbents, and a $579,787 grant to mining giant Rio Tinto.

The latter grant was awarded to Rio Tinto’s aluminium division, suggesting the grant may be supporting a study into the use of renewable energy in aluminium production or the increased use of aluminium smelters in demand response mechanisms.

ARENA has previously supported a partnership between Rio Tinto and First Solar, which saw a 1.7MW solar PV farm built at Rio Tinto’s bauxite operations in Weipa (with a total of 6.7MW of solar capacity originally planned). The project is used to reduce the amount of diesel consumed to generate electricity at the site.

But it is currently unclear what these grants relate to, other than that they were awarded under ARENA’s ‘Advancing Renewables Program’.

RenewEconomy understands that the list of projects may have been disclosed by Taylor inadvertently. At the very least, the list of grants was published without the knowledge of ARENA, with some of the projects not yet publicly announced.

The publication of the grant list occurred on the same day as Taylor issued a new set of regulations for ARENA, designed to expand the renewable energy agency’s functions to include providing financial assistance to carbon capture and storage projects.

The new regulations also extend ARENA’s functions to funding a wide range of the Morrison government’s ‘technology investment roadmap’ priorities, including new transport fuels and soil carbon projects – and also open up ARENA funding for ‘low emissions technologies’ through a very broad definition, opening up the door to ARENA funds being channelled into gas projects.

ARENA has been contacted for comment, as has the AEC.