Think-tank The Australia Institute (TAI) is making a pre-budget plea to the Morrison Government for a $460 million top-up to the Australian Renewable Energy Agency (ARENA) before funding dries up in a mere matter of months.
The $460 million top-up represents an urgent two-year funding extension for ARENA, $230 million per year for 2022-23 and 2023-24. The call comes from a TAI Discussion Paper from Dan Cass, Energy Policy & Regulatory Lead at TAI, in which Cass argues that technology’s centrality to reducing emissions by 2030 is in jeopardy as ARENA has only $200 million for allocation to new projects.
Cass’s paper is conscious that this immediate call for funding is but a short-term solution, perhaps enough to help the Federal Government deliver its promised ‘Energy Technology Investment Roadmap’ but a long-term plan for ARENA and renewable energy funding and integration is desperately needed.
Energy Minister Angus Taylor presented a promethean argument to the UN Climate Conference in Madrid recently, saying that technological innovation was at the heart of Australia’s emissions reduction strategy and the international community should take a similar approach. So it is time for Taylor, a man notoriously bad with figures, gets serious about funding for innovation if he is going to bank on Australian ingenuity.
“ARENA has been essential in bringing down the cost of renewable energy in the last decade but its work is far from finished,” said Cass. “The next renewable energy challenges for Australia are grid integration, storage and reliability, as well as new export opportunities in green hydrogen and zero-emissions electricity.”
Since ARENA was created in 2011 it’s running budget of $1.44 billion has been allocated across 478 projects with an accumulated value of $5.49 billion. However, a new 10-year funding commitment of at least $2.5 billion is the fact of the necessity for ARENA and Australia’s renewable energy transition. “A two-year fully funded extension for the agency will keep clean energy innovation in Australia thriving in the short-term,” noted Cass.
However, ARENA needs more than a new 10-year funding extension, the agency also requires an expanded mandate to include renewable energy transport and green hydrogen for manufacturing, a remit that would of course necessitate a larger slice of the pie.
The slice, at least in terms of the short-term extension, can be legislated on-budget or alternatively it can be allocated in part from the Clean Energy Finance Corporation (CEFC) through a dividend. Ideally however, both organisations need firm independent funding futures.
Cass noted that ARENA is not only popular with the Australian people, citing new national polling (commissioned by TAI) showing majority support for ARENA’s extended funding, but popular with Federal politicians too. Cass’s analysis of Federal Ministerial media releases shows that the Coalition Government associated itself with ARENA’s success 149 times in the last six years.