ARENA sharpening its focus as it tackles next steps in energy transition

TESLA battery installation.

ARENA launched its 2019 investment priorities in a bid to sharpen its investment focus. ARENA funding will be directed towards three investment priorities.

The 2019 ARENA investment priorities reflect the pace and progress of the energy transition:

• integrating renewables into the electricity system
• accelerating the growth of a hydrogen industry
• supporting industry to reduce emissions

How do we integrate renewables energy in to the electricity system?

By investing in innovative ways to use, store, manage and share renewable energy, ARENA can help provide affordable, secure and reliable electricity for Australians through the energy transition.

With the electricity sector undergoing rapid transition, ARENA is looking to support technologies and business models that will enable higher shares of renewables in the electricity sector.

Under this priority, ARENA will look towards funding for:

• New approaches to system security and reliability
• Flexibility and storage solutions such as batteries, pumped hydro and concentrated solar thermal
• Distributed energy resources including rooftop solar, home batteries, energy management systems and demand management
• Electric vehicles – particularly focussed on the technical, economic and regulatory aspects of managed charging and vehicle-to-grid, and projects to gather charging data to inform forecasting and grid integration
• Solar PV R&D particularly focussed on novel commercial uses of solar PV.

How does hydrogen energy work?

Renewable hydrogen produces zero emissions when burned, and can be combusted to produce heat, stored for long periods and transported vast distances overseas. When produced using electrolysis, hydrogen can be made from renewable electricity making it emission free. Hydrogen is a versatile energy carrier with a wide range of potential end uses – from injection into the gas network for use powering gas appliances through to industrial uses and transport.

ARENA will help drive innovation in hydrogen supply chains, from production to end use, creating opportunities across the domestic economy, and positioning Australia to become a major renewable energy exporter.

With global demand for hydrogen expected to grow significantly in the coming decade – as countries like Japan and Korea seek to import renewable hydrogen – hydrogen also presents a major export opportunity for Australia.

Under this priority, ARENA is focussed on reducing the production costs of renewable hydrogen, informing industry on commercial hydrogen costs through real data, increasing skills and understanding of how to integrate hydrogen into different applications and increasing the readiness of hydrogen technologies.

Under this priority, ARENA will look to fund:

• Feasibility studies for projects involving 100+ MW electrolysers
• Commercial-scale deployments involving 10-40 MW electrolysers in industries and applications with high potential demand for hydrogen
• Demonstration-scale projects involving 1-10 MW electrolysers being deployed in new applications such as transport or remote area power systems with onsite hydrogen production and fuel cells or turbines to drive commercialisation of component technologies
• Projects and activities that support the forthcoming National Hydrogen Strategy.

How does ARENA support industry to reduce emissions?

ARENA will help Australian industry reduce emissions by investing in innovative and replicable technologies and processes that increase the adoption of renewable energy (including renewable electricity, renewable fuels, solar thermal, hydrogen and bioenergy).

With industry accounting for 40 per cent of all energy used in Australia, accelerating the uptake of renewables in this sector is critical to helping meet emission targets.

To this end, ARENA is looking to show how renewable energy and enabling technologies can reduce energy use, cost and emissions, and increase energy productivity, to inform pathways to energy transition for target sectors and industries particularly for process heat, and to increase collaboration, build skills and capability and demonstrate key technologies.

Under this priority, ARENA will look to fund projects in heavy industries such as alumina, iron, steel, ammonia and cement including feasibility studies, demonstrations and pre-commercial deployments incorporating renewable energy and enabling technologies into energy intensive processes and sites.

ARENA will also look at other industries such as food and beverage manufacturing, pulp and paper, bricks and ceramics, wood and mining.

Across all sectors, ARENA will be looking at how lower temperature processes could be addressed using biomass or biogas, solar thermal and other renewable technologies, and how high temperature processes could be addressed using CST, electric heating technologies and renewable hydrogen.

Finally, ARENA will also look at industrial “eco parks” where there are opportunities to use waste heat and other technologies across facility boundaries.

The Investment Plan builds on the work, achievements and knowledge ARENA has gained to date. The 2019 ARENA investment priorities have been developed in consultation with the energy industry and will have scope to address the Australian Government’s aim to increase the amount of dispatchable electricity within the system.

ARENA CEO Darren Miller said the the ARENA investment priorities focus on opportunities to best assist with the complex energy transition underway.

“Our new investment priorities are geared towards future proofing our energy system and economy and help to further unlock the vast renewable resources Australia has,” he said.

“The transition is underway but there is still a lot of work to do and ARENA has the expertise and deep understanding of the renewable energy sector to help address the long term needs,” he said.

“We need to overcome the challenge of integrating renewables into the grid as we switch to an electricity system that is more complex, more decentralised and more variable,” Miller said.

Having previously looked at exporting renewables, ARENA has now elevated hydrogen to an explicit priority for funding that will look growing a large scale hydrogen industry for both domestic applications and export.

“We need to launch a hydrogen industry to create opportunities across the domestic economy and to help position Australia as a major renewable energy superpower through exporting hydrogen.

“Finally, we need to support industry, with accounts for 40 per cent of total final energy use in Australia, as they transition to renewables and look to reduce emissions.

“Without our financial support the pathway to commercialisation would be blocked for many new technologies and businesses so ARENA has an important role to play,” Mr Miller said.

Since its establishment in 2012, ARENA has funded $1.44 billion in funding to 478 renewable energy projects. With a total value of $5.49 billion, the projects have driven innovations in a wide range of technologies including solar PV, batteries, biofuels, hydrogen, solar thermal, ocean energy, pumped hydro, distributed energy and demand response.

These projects are helping to accelerate Australia’s energy transition, which is advancing at a world-leading rate according to the Clean Energy Regulator. The latest research found that nearly 3500 MW of new projects were accredited in 2018, with 4000 MW of large scale generation predicted to come online in 2019.

“I look forward to delivering our plan and encourage the R&D community and businesses – particularly those in industry – to visit our website to discover more about available funding opportunities,” Darren Miller said.

• Read about the 2019 ARENA investment priorities.
• Download ARENA’s 2019 Investment Plan.

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