Renewable energy: not all of the Clean Energy Future package is being fought over in Federal Parliament

06 Sep 2012Archived News Climate Change Matters

There is bipartisan support for government investment in renewable energy and the latest Commonwealth agency to focus on renewable energy is ARENA - the Australian Renewable Energy Agency.  “Open for business” from 1 July this year, ARENA is an independent Commonwealth authority, supporting innovations that improve the competitiveness of renewable energy technologies and increase the supply of renewable energy in Australia. It has $3.2 billion to spend and brings together a number of existing programs under the one roof. These include the Solar Flagships program, the emerging renewables program, advanced biofuels, the Renewable Energy Venture Capital fund and the Australian Solar Institute. ARENA already has a number of exciting projects underway. Read more about the Australian Renewable Energy Agency. 

Energetics' Principal Consultant, Dr Gordon Weiss, recently attended a workshop run by ARENA which sought the opinions of participants as to how ARENA should spend its money. There were representatives from all different flavours of renewable energy as well as finance people, academics and a few consultants. Key outcomes of the workshop included the need to ensure that ARENA funds projects that have a clear path to commercialisation and can ultimately demonstrate their viability to the finance sector. ARENA needs performance indicators to demonstrate that taxpayers' funds are being spent wisely and it must regularly and openly report successes and failures. Energetics key comments are:

  • Energetics believes that ARENA should support emerging renewable technologies up to and including the point where first-of-a-kind investments are required – the RET alone will not achieve deliver support.
  • We do not agree that support should be given to an extensive portfolio of technologies.  There are high costs associated with developing energy technologies to the point where their commercial viability is demonstrated, and we would be concerned that ARENA’s resources could be diluted. Instead, selecting technologies that match Australia’s renewable energy resources would be best. Enabling technologies such as grid management systems and energy storage systems are critical to the widespread adoption of non-dispatchable renewable energy technologies.
  • Energetics agrees that it is essential to build capacity to deliver renewable energy technologies. However, this must be directed towards capacity that is appropriate to Australia and deliver competitive advantages to our industry. The long term contribution of ARENA will be diminished if it results in a range of industries that require on-going support from Government to remain competitive. 
  • Particular attention should be given to the creation and protection of intellectual property to ensure that the Australian people retain a stake in IP generated through the support of ARENA. This would be a clear necessity in cases where Australian corporations receive support from ARENA and are later acquired by overseas interests. Clauses in funding agreements that require the ownership of all IP generated through the support of ARENA revert to the Commonwealth in certain circumstances may address this concern.
  • The sharing of knowledge must be an essential part of ARENA’s activities. Energetics believes that organisations that receive funding  to demonstrate renewable technologies at commercial scale must be required to report all costs associated with the construction and operation of the demonstration system, and report the performance of the facility. The information must be provided in sufficient detail to allow others to assess the commercial viability of the technology.
  • It is essential that ARENA require proponents to provide strong evidence that their project is viable, and that funding deeds define clear milestones that must be met if funding support is to continue.
  • We do not believe the role of ARENA is to address market barriers. That is the role of the Clean Energy Finance Corporation and the RET. It is essential that projects supported by ARENA offer a clear path to commercialisation, taking into account the characteristics of the Australian energy markets. We support the view that continuously open funding rounds are more effective as they result in higher quality applications by removing deadline pressures.

ARENA: Emerging Renewables Program

Energetics’ advice is to closely consider the opportunities within the Emerging Renewables Program.  We can assist you with feasibility studies as well as application development.  The key features of this program are outlined below, as taken from the ARENA website:

 

Emerging Renewables Program

 

Program objective

“support the development of renewable energy technologies in Australia across the innovation chain”

Program funding

  1. Projects: grants for the development of renewable energy technologies along the technology innovation chain. 
  2. Measures: grants for:
  • renewable energy industry capacity building activities
  • renewable energy industry development activities
  • preparatory activities for a Project.

Applications and assessment

  1. Projects

There are two phases to making an application for a project:

  • Phase one: submission of an Expression of Interest (EOI).
  • Phase two: EOI applicants meeting the merit criteria to a high standard are invited to submit a Project funding application.
  1. Measures

Unlike an application for a Project, when submitting an application for funding for a Measure there is only one phase – there is no EOI requirement

Guidance for applying for Project funding – key points

Phase 1 - submitting an EOI

A Project Expression of Interest (EOI) Application Form needs to be completed.  Potential applicants should carefully read ARENA’s guidance to ensure that they are eligible and can meet merit criteria to the high standard demanded.

Phase 2—application for project funding

Those invited to proceed to Phase 2 will be sent an application form together with further information and feedback on the EOI assessment.

At this stage applicants must provide:

  • detailed responses to the merit criteria
  • a project plan commercialisation strategy and intellectual property plan
  • completed documentation as outlined by the program team. 

Guidance for applying for funding for a Measure – key points

Grants are awarded to one of the following:

  1. Renewable energy industry capacity building activities.
  2. Renewable energy industry development activities.
  3. Preparatory activities for Projects.

There is just one phase. 

Substantial guidance is provided on the ARENA website and applicants specifically need to consider eligibility criteria and whether they can meet the merit criteria to a high standard. 

ARENA requires the completion of a number of plans including Budget and Funding Sources, Risk Management Plan, a Funding Agreement Compliance Table and an Emerging Renewables Knowledge Sharing Plan. 

Approval process

ARENA must obtain the approval of the Minister for Resources and Energy in order “to offer funding for, or to make changes to, a project or measure involving a grant or grants totalling more than $50 million.”

 

View successful applications.

 

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