Prime Minister Scott Morrison has announced a $1.9
billion investment package in next generation energy technologies
to lower emissions, create jobs, cut costs and improve energy
supply.

Coupled with announcements regarding the gas sector made on 15 September 2020, this
announcement reinforces that the Commonwealth Government is focused
on facilitating and encouraging investment in the energy sector as
a COVID-19 economic recovery measure.

What does the package include?

The centrepiece of the package is an expansion of the mandates
of both the Australian Renewable Energy Agency
(ARENA) and the Clean Energy Finance Corporation
(CEFC) to invest in next generation projects and
technologies.

This announcement is especially timely for ARENA, as it will
receive $1.62 billion in new funds and have its statutory life
extended by ten years (it is due to shortly exhaust its existing
funds).

The package also includes funding for:

• a new Technology Co-Investment Fund (a body recommended by the
  King Review) to support agriculture,
  manufacturing, industrial and transport sector businesses who adopt
  technologies which increase production or reduce emissions
  ($95.4 million);




• a new Carbon Capture Use and Storage Development Fund to assist
  in developing carbon capture projects ($50
  million);




• a new Future Fuels Fund, which is intended to allow businesses
  and regional communities to take advantage of hydrogen, electric,
  and bio-fuelled vehicles ($74.5 million);




• the establishment of a hydrogen export hub ($70.2
  million);




• support for micro-grids in regional and remote communities
  ($67 million);




• increasing home and business energy productivity ($52.2
  million);




• implementing recommendations from the King Review, including reducing the time taken
  to develop new Emissions Reduction Fund methods from 24 months to
  less than 12 months ($24.6 million); and




• increasing energy/emissions data and cyber-security reporting
  and the development of a framework for offshore clean energy
  project development ($40.2 million).

Expanded mandates

The Prime Minister has foreshadowed new legislation that will
enable ARENA and the CEFC to support low/no emissions technologies
by expanding their mandates. This is a significant change for ARENA
in particular, as it has previously been limited to technologies in
the renewables space, and matters incidental or conducive
thereto.

The new mandates will allow both organisations to focus on the
development and funding of next-generation energy efficient and
carbon reducing technologies such as hydrogen, soil-carbon
sequestration, carbon capture and storage, green-steel production
(based on domestic hydrogen supply) and the energy reduction of
industrial processes.

New funding for ARENA

The Federal Government has committed $1.43 billion in funding
for ARENA over the next 10 years and an additional $193.4 million
for the delivery of targeted programs for future initiatives in
clean technology.

In addition to the $1.43 billion, ARENA and the Clean Energy
Regulator will be permitted to use part of the $2 billion Climate
Solutions Fund, although details on the extent of this use are as
yet unclear.

Next steps

Further information regarding each of the funded items announced
by the Prime Minister is yet to be shared, in particular:

• how the $70.2 million in funding for a hydrogen export hub will
  affect or be accessed by existing private sector projects;




• which government body will be responsible for developing a
  framework for offshore clean energy project development; and




• details from ARENA on its priority projects and technologies
  for new funding, including whether any additional funding will be
  allocated to hydrogen on top of its already announced $70 million
  Renewable Hydrogen Deployment Funding Round.

The Prime Minister’s media release can be found here.

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