Federal energy and emissions reduction minister Angus Taylor has flagged the end of federal government support for wind and solar projects, telling a business gathering in Sydney that storage and grid integration technologies, including hydrogen using coal, is now a key government priority.
In a speech at a Committee for Economic Development of Australia (CEDA) event in Sydney, Taylor said wind and solar were “commercially viable” and no longer needed support, so the government’s financial support would pivot to emerging technologies with a particularly strong focus on hydrogen.
“Wind and solar as stand alone sources of energy are now commercially viable. So the government should not crowd out private sector investment,” Taylor said.
“We must move our investments to the next challenges. Hydrogen, carbon capture and storage, lithium, advanced livestock feed supplements, biological sequestration, the integration of distributed energy, and improvements in transmission and demand management.”
Taylor’s speech flagged the development of the ‘technology roadmap’ that the Morrison government is pursuing as an alternative to the adoption of a more ambitious emissions reduction target.
Taylor said the government was still progressing its design, and that he had appointed chief scientist Dr Alan Finkel to chair a technology investment roadmap ministerial reference group that will help guide this process.
The advisory group will prepare an annual ‘clean technology statement’ to provide updates on global technology developments. The first statement will be released later in the year, ahead of the Glasgow climate talks.
The advisory group will also release a consultation paper, which is expected to be released soon, to seek input into the development of the technology roadmap design.
Dr Finkel led the development of the National Hydrogen Strategy, adopted by the COAG Energy Council late last year, which recommended that the government look to the production of hydrogen from coal and gas resources, combined with carbon capture and storage, as a way to kick off the industry and to establish skills and supply chains.
Taylor appears to be leaning heavily into Finkel’s recommendations, setting a ‘H2 under 2’ target, that will aim to achieve hydrogen production in Australia at a price below $2 per kilogram.
“Despite the very significant benefits that can come from hydrogen, it’s not yet economic for large scale deployment in our energy system,” Taylor said. “The first specific goal will be H2, h two under two, that is hydrogen under $2 per kilogram. That’s the point where it competes with alternatives in large-scale deployment across our energy system.”
The advisory group will develop a series of papers throughout the year, culminating in the final technology roadmap to be presented to the UN climate talks in Glasgow.
“Our strategy will be based on a series of detailed pieces of work that we will complete over the rest of this year,” Taylor said.
“That work must look at our investments. It must evaluate the technology and then encourage prospective technologies to full commerciality and deployment without massive government subsidies.”
Taylor said that the government looked to the countries that had not set a net zero emissions target as examples of the kind of approach the Morrison government would take to emissions reduction.
“Over 70 per cent of the world’s GDP has not set a net zero by 2050 target,” Taylor said. “If you look at some of those same countries, the US, China and India for example, they are excellent at adopting and exploiting technology advancements and that the key for the world. The Australian Government will take a technology based long term emissions reduction strategy to Glasgow at the end of the year.”
However, Taylor appeared less enthusiastic about providing government support for the development of battery storage technologies, saying that more of that research is being undertaken “offshore” and that he was more concerned about supplies of longer-term storage.
The energy minister did not confirm whether the Australian Renewable Energy Agency would be allocated additional funding. ARENA as funded much of Australia’s clean technology research and development since its inception in 2012, but is approaching the end of its funding allocations.
“ARENA has funding through to 2022 and they’re playing an enormously important role in those early stage investments,” Taylor said. “They’re investing in dispatchable generation projects, they’re investing in pilot projects in hydrogen. They are playing a very, very, very important role.”
The energy minister praised the Latrobe Valley hydrogen pilot project as an example of the type of project that the minister would like to support. The project was able to combine $50 million in taxpayer support for a $500 million project that seeks to demonstrate the production of hydrogen from brown coal.
The pilot project was expected to produce just three tonnes of hydrogen.
Taylor said that he would be looking to support similar projects, that were able to use taxpayer funding to leverage substantial amounts of additional private sector investment.
The shift in focus by Taylor towards relatively unproven technologies was criticised by Greenpeace Australia, particularly the prospect of further investment in carbon capture and storage projects, saying the Morrison government was heading in the wrong direction.
“This roadmap is going entirely in the wrong direction. The technology to solve today’s problems is available now and already powering the country in the form of clean, reliable and affordable renewable energy and storage,” Greenpeace Australia Pacific’s Dr Nikola Casule said.
“Huge global economies like Germany and the United Kingdom are already well on their way in making the transition to renewables, leaving the Australian Federal Government lagging behind.”
“If this is the plan Taylor intends on taking to the world stage, Australia can once again be expected to be seen as a global blocker of climate action.”
While saying that the government should no longer be supporting commercially viable renewable energy technologies, Taylor defended the Morrison government’s commitment of taxpayer funds to cover the cost of a feasibility study into a new coal-fired power station, and to underwrite new projects under the Underwriting New Generation Investment’s scheme.
“This is about kick starting the investment, getting the private sector investment in and then getting out. When private sector steps up, we must step back. And that’s exactly what we’re doing,” Taylor said.
“That’s the approach we’ve been taking as a government and it means every dollar of taxpayers money is spent well and be spent to get an outcome and as fast as we can we leave it to the private sector. That’s the approach. That’s the philosophy.”
When pushed on the prospect of the Morrison government adoption a zero net emissions target in an interview earlier in the week, Angus Taylor refused to rule it out altogether.
However, the Morrison government has spent most of the most recent parliamentary sitting period attacking Labor for recommitting to its own zero emissions target, saying that it was more important to have a plan for reducing emissions than having a target.