Selling out the ARENA – how grants for renewables have changed over time

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From: Cornwall Insight

The Australian Renewable Energy Agency (ARENA) funding gives new technologies a chance to prove their viability for eventual commercial use by the wider market.

Tracking where ARENA has provided funding provides an insight into what nascent technologies have been deemed important enough to warrant ARENA funding.

This Chart of the Week looks at a few trends from the ARENA funding over time, pinpointing future technologies that may shape the Australian energy market transition.

Figure 1 shows the funding awarded by ARENA since 2012 based on the project start date. As seen, the funding varied wildly from year to year at the scheme’s start, with large outlays in the first few years followed by relative droughts over the middle of the last decade. Since 2017, funding awards have been largely steady.

ARENA funding awarded from 2012 to 2022 (based on project start date).

Image: ARENA

Not surprisingly, the mix of projects receiving funding has changed over time. For the period until 2021, funding was dominated by solar energy projects with also significant contribution to battery storage projects (see Figure 2).

ARENA funding awarded to 2021 (using project start date) by category.

Image: ARENA

Note that the funding figures above for solar include three projects that were awarded significant funding: $166.7 million for an AGL solar project in Broken Hill, $102 million for the Moree Solar Farm, and $129 million for the Australian Centre for Advanced Photovoltaics (ACAP) for research and training.

Looking at Figure 3, representing a more recent history, we can see that since 2021 (inclusive), the funding mix has changed significantly. More recently, higher proportions of funding have been awarded to battery storage, hydro/pumped-hydro, hydrogen, electric vehicles, demand response and solar thermal.

ARENA funding awarded since202i (based on project start date) by category.

Image: ARENA

Again, this is not a surprise, as these technologies and initiatives will be part of the energy transition. An interesting observation is that solar energy has dropped down the scale significantly, perhaps proven as a commercial technology, thus not warranting ARENA funding to the same extent.

Overall, this points to the technologies that may shape the future of Australian energy systems under current government settings. It will be interesting to see whether funding for ARENA is affected by the upcoming Federal Budget next week.

Author: Mohsin Ali, energy market intelligence manager, Cornwall Insight

 

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