Federal government allocates $1.4 billion ARENA funding boost for low emission technologies

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The Federal Government has allocated $1.4 billion in ARENA funding to push the Australian Renewable Energy Agency towards low emission technology.

The government is gunning for the agency and the Clean Energy Finance Corporation to push “low-emission” technology such as carbon capture, increased efficiency, and storage over solar and wind generation.

The ARENA funding package includes:

  • Contributing $52.2 million to increase the energy productivity of homes and businesses, including a sector-specific grant program for hotels supporting equipment and facilities upgrades
  • Supporting businesses in the agriculture, manufacturing, industrial and transport sectors to adopt technologies that increase productivity and reduce emissions through a new $95.4 million Technology Co-Investment Fund that was recommended by the King Review
  • Piloting carbon capture projects that will dramatically help cut emissions with a $50 million investment in the Carbon Capture Use and Storage Development Fund
  • Helping businesses and regional communities take advantage of opportunities offered by hydrogen, electric, and bio-fuelled vehicles with a new $74.5 million Future Fuels Fund
  • Setting up a hydrogen export hub worth $70.2 million to scale-up demand and take advantage of the advancements in this low emissions, high powered source of energy
  • Backing new microgrids in regional and remote communities to deliver affordable, reliable power with $67 million
  • Slashing the time taken to develop new Emissions Reduction Fund (ERF) methods from 24 months or more to less than 12 months, involving industry in a co-design process and implementing other recommendations from the King Review into the ERF, worth $24.6 million
  • Boosting energy and emissions data and cyber-security reporting and supporting the delivery of future Low Emissions Technology Statements under the Technology Investment Roadmap process, as well as developing an offshore clean energy project development framework, together worth $40.2 million

Broadening the mandate will require parliamentary approval

Energy and Emissions Reduction Minister Angus Taylor said getting the next generation of energy technologies right would not only help to keep prices low and the lights on, but would importantly grow jobs, strengthen the economy and reduce emissions.

The push to broaden the mandate into “low emissions” technologies will require parliamentary approval – rejected by the Senate when the Coalition first tried to scrap the bodies – and comes just days after the unveiling of a major gas package, and the government’s extraordinary ultimatum to build a 1GW gas plant in the Hunter Valley.

“Solar panels and wind farms are now clearly commercially viable and have graduated from the need for government subsidies and the market has stepped up to invest,” prime minister Scott Morrison said in a joint statement with energy minister Angus Taylor.

“We will reduce the cost of new and emerging technologies, not raise the cost of existing technologies or layer in new costs to consumers and businesses through mandated targets or subsidies,” Taylor added.

Included in the broader $1.9 billion Arena funding package is $50 million for Carbon Capture and Storage.

Another $70.2 million will be spent on establishing a “regional” hydrogen export hub, which could be cited in the Latrobe Valley (Vic), or Darwin (NT), north-west WA, Gladstone (Qld), Hunter Valley (NSW), Bell Bay (Tasmania) and the Spencer Gulf (South Australia).

Another $50 million will go to energy efficiency measures for homes and commercial buildings, and $95.4 million will go into a Technology Co-Investment Fund.

A further $67 million will be allocated on renewable and battery storage micro-grids for remote areas including mines, farms and communities currently reliant on expensive diesel.

The government has also allocated $74.5 million will given to a “future fuels fund”, which will focus on “refuelling stations” for hydrogen, electric or bio-fuelled vehicles.

Other funding initiatives include $24.6 million will go to the Clean Energy Regulator to expand and accelerate projects that can develop carbon credits.

ARENA has also contributed to battery storage projects, including a $25 million injection into two Victoria plants.


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