Can community batteries plug an energy storage gap?

More than 3 million Australian households now have rooftop solar installed. That’s more per capita than any other nation.

All that solar energy is helping us to switch our electricity system to clean energy. But it also causes its own headaches, particularly in the critical area of grid stability.

In March, the CSIRO released the Renewable Energy Storage Roadmap report. It predicts Australia will need a massive increase in energy storage to support the renewable energy transition. By 2030, the roadmap predicts the National Energy Market will need six times more than is available today.

Even once pumped hydro storage projects like Snowy 2.0 are up and running, there is still expected to be a shortfall of 11 GW of storage capacity needed to firm up the variable renewables in our electricity system.

Large scale batteries, like the eight grid-forming projects supported by ARENA’s recent $176 million funding round, are already making a major contribution.

But what about energy storage at a more local, community level?

Individual solar-owning households appear reluctant to install home batteries. Roughly, only 180,000 have done so, although that figure is growing.

Community batteries might be the missing link in our energy storage needs. They could provide energy storage both for the distribution network and for local needs.

Lower bills and emissions, greater grid stability

Solar panels on rooftops at Alkimos Beach. Image: Lendlease — Households in Alkimos Beach, Western Australia took part in a community battery trial. Image: Lendlease

At times of plentiful solar generation, such as the middle of the day, the battery can be charged. At times of local peak demand or at night, stored energy can provide power back to the community and ease grid constraints.

But community batteries are a relatively new and untried technology. They are still rare in Australia and globally.

The problem is in the detailed understanding of how they might operate in the real world.

That’s why ARENA is rolling out a funding program to fix that knowledge gap and understand how to scale-up their use.

ARENA CEO Darren Miller said community batteries represent the next step in optimising distributed energy resources in the electricity grid.

“Not everyone is able to install rooftop solar, but by storing electricity close to the point of consumer demand, we can reduce network costs and alleviate constraints in areas with high solar penetration. This will ultimately reduce electricity costs for all consumers,” he said.

The $171 million program administered by ARENA will support 342 community batteries to be built across Australia.

As part of the Federal Budget 2022/23, the Albanese Government committed to build 400 community batteries across Australia. A further 58 batteries are to be funded under a separate program which recently closed.

Overall, the program is intended to lower energy bills, cut emissions, reduce pressure on the grid and support more rooftop solar being installed.

More detailed questions to be addressed include around the economics of community batteries, battery size and configuration, business models, and the pros and cons of both front-of meter and behind-the meter setups.

ARENA expects the initial $120 million round will provide valuable lessons to inform industry and future applicants for a second round.

What are community batteries?

Community batteries fit into the renewable energy storage gap between small, household batteries and big, utility scale batteries.

Household batteries are typically in the 5 kWh to 15 kWh range, whereas the most recent grid-scale battery projects to receive ARENA funding are up to 20,000 times larger.

Community battery projects are expected to occupy the middle ground with between 50 kW and several megawatts nameplate capacity.

In terms of size and appearance, community batteries can range from a fridge to a small shed, or as big as a shipping container.

An ARENA supported trial in Alkimos Beach, Western Australian connected 100 households to a 1.1 MW community battery.

Participating households shared in $81,376 of power bill savings over the five-year trial.

Benefits for network operators and retailers included reduced electricity consumption during periods of high demand for grid power.

At the other end of the scale, United Energy is installing community batteries the size of fridges mounted to power poles in south eastern Melbourne under an ARENA-funded trial.

What is Round 1 funding?

Round 1 of ARENA funding is split between two streams:

Stream A: Distributed Network Service Providers (DNSPs)
Stream B: Applicants that are not DNSPs

Under this round, each applicant must plan to connect a minimum of five batteries to the electricity distribution network.

Each battery must be within the range of 50 kW to 5 MW in size.

Batteries that are co-located or share a connection point will be considered a single community battery.

Expressions of Interest opened in early April for between $3 million to $20 million in funding.

However, projects should be completed within 24 months of execution of an agreement.

Projects that require more planning and development should keep an eye out for details of Round 2 funding. More details for Round 2 are expected to be announced in late 2023.
ARENA will be hosting two information sessions on the Community Batteries Funding Program in April.

Further information on how to apply can be found at ARENA’s funding page.

CSIRO Roadmap points to big energy storage gap

Renewable energy storage must undergo massive growth if Australia is to achieve net zero by 2050.

A new report from the CSIRO and supported by ARENA funding, says between 10 to 14 times more storage could be needed in the coming decades to support the National Electricity Market (NEM).

The Renewable Energy Storage Roadmap forecasts rapidly rising electricity demand across industries and sectors as they electrify.

To help close the gap, the report urges consideration of all forms of energy storage.

CSIRO Energy Director Dr Dietmar Tourbier says the Roadmap is a major step towards pinpointing fit-for-purpose solutions for energy storage.

“For example, batteries may be the best option for local and short duration storage of electricity,” Dr Tourbier said.

“While thermal or heat energy (like steam) might be technology better suited for heat intensive industries,” he said.

Storage shortfall

By 2030, the report says, the NEM will need around six times more power storage than in 2024.

Even the combined 3,700 MW storage committed in short duration storage and pumped hydro, such as Snowy 2.0 in NSW, Kidston in Queensland and Cethana in Tasmania, will cover only a fraction, leaving a shortfall of 11,400 MW.

Customer-owned storage will cover some of that gap, the report says.

However, should that not materialise, the task will fall to utility-scale developers, the report says. But it warns that planning, approvals and investment decisions could delay any such projects.

CSIRO CEO Dr Larry Marshall says the sector must explore new technologies to fill the gap.

“There is no silver bullet for reaching net zero,” Dr Marshall said.

“We need multiple shots from renewables, batteries, hydrogen, thermal storage, pumped hydro, sustainable aviation fuels, and a host of new science-driven technologies.”

What is ARENA doing to support renewable energy storage?

MGA Thermal Energy co-founders Alexander Post and Erich Kisi — MGA Thermal stores energy in blocks packed with chips of a miscible gap alloy

ARENA has supported and continues to support development of all the above, plus more.

Late last year, ARENA announced the recipients of its large scale battery round. Eight projects will collectively receive $176 million to provide 2.0 gigawatts of grid-forming storage.

In October 2022, ARENA conditionally approved $45 million to Hydrostor to build a 200 MW compressed-air technology project in Broken Hill.

And in February of this year, ARENA conditionally committed $65 million to Vast Solar. The company plans to build a first-of-a-kind concentrated solar thermal project in at Port Augusta.

MGA Thermal is developing with ARENA’s help a miscible gap alloy thermal energy storage system. And ARENA has also supported RayGen to develop an innovative thermal storage system using its concentrated solar PV technology.

ARENA CEO Darren Miller said the Roadmap highlights the critical need to increase the level of energy storage across the system, including thermal storage for industrial processes.

“ARENA has been supporting the development of energy storage for more than a decade,” Mr Miller said.

“We have invested more than $500 million across batteries and other storage technologies,” he said.

“ARENA plays a major role in increasing the options available to meet Australia’s medium- and long-term storage needs by supporting a range of emerging technologies.”

Alongside existing projects, ARENA will soon launch a funding round to support community batteries.

Global award a ‘testament’ to Australian solar research

An Australian team of researchers has won recognition for its pioneering work on solar cells.

Alongside Australia’s so-called “solar superman” Professor Martin Green, Professor Andrew Blakers, Dr Aihua Wang and Dr Jianhua Zhao received the 2023 Queen Elizabeth Prize for Engineering (QEPrize) for their research, work and development of Passivated Emitter and Rear Cell (PERC) solar photovoltaic technology.

PERC technology has underpinned the recent growth of high performance, low-cost solar electricity, to harness the power of the sun. It now features in the majority of solar panels manufactured around the world.

Professor Green and his team of researchers have held solar-efficiency world records for 30 of the last 38 years.

The QEPrize is awarded each year to engineers responsible for ground-breaking innovations that have been of global benefit to humanity.

Professor Green said he hopes that winning the QEPrize will open people’s eyes to the possibilities of renewable energy.

“I am honoured to share this esteemed award with Andrew Blakers, Aihua Wang and Jianhua Zhao,” Professor Green said.

“As the world feels the devastating impacts of our changing environment and collapsing ecosystems, I feel passionately that more must be done to reduce our reliance on fossil fuels and keep up with the trajectory of human civilisation,” he said.

ARENA support for solar research

Professor Green is a former director of the Australian Centre for Advanced Photovoltaics (ACAP). He started a career in solar research in the 1970s, around the time of the oil crisis.

ARENA has since 2012 worked closely with ACAP. In 2022, ARENA boosted its funding support by $45 million. By 2030, ACAP will have received an expected total of $128.99 million in ARENA funding.

Incoming ACAP director Professor Renate Egan described the award recipients as “true pioneers in our field”.

“This award is testament to a lifetime of research with a view to what is possible, often delivering beyond expectations,” Professor Egan said.

“They continue to contribute, with Martin and Andrew playing a key role in leading research activity within ACAP, sharing their experience with the next generation of innovators,” she said.

“ARENA’s ongoing support of our work at ACAP has meant that successive generations of solar researchers have been able to work on advancing solar technologies that will make solar power even more powerful and cheaper for everyone.

“It’s exciting to imagine where our work will take us next,” Professor Egan said.

Over the past decade, QEPrize has honoured 20 engineers whose innovations have helped billions of people around the world.

The 2023 laureates will be formally honoured at the QEPrize presentation ceremony later this year. They will receive £500,000 and a unique trophy.

Hydrogen deal unites Australian innovation with German expertise

Australia and Germany are boosting research into renewable hydrogen production with around $110 million combined conditional funding for four joint projects.

The agreement brings together Australian and German industry and research partners to deliver new projects, primarily based in Australia.

The main use of hydrogen is as a raw material for industry. At present, hydrogen is mostly derived from methane in an emissions intensive process. Renewable hydrogen could reduce emissions in what are known as hard-to-abate industries, and also some transport sectors.

The funding is part of the German-Australian Hydrogen Innovation and Technology Incubator, known as HyGATE. The initiative opened in March 2022 with Australia and Germany committing funding up to AU$50 million and €50 million respectively.

This round sees ARENA, on behalf of the Department of Climate Change, Energy, Environment and Water (DCCEEW), contributing $50 million.

Project Management Jülich (PtJ) is managing €40 million ($60 million) on behalf of Germany’s Federal Ministry of Education and Research (BMBF).

Global collaboration

HyGATE builds on both nations’ respective strengths. Australia is seen as a potential world leader in the production and export of clean hydrogen. Germany holds expertise in hydrogen technology and is planning to import significant amounts of hydrogen in the future.

Minister for Climate Change and Energy Chris Bowen MP says collaboration with Germany will help grow Australia’s vision of becoming a renewable energy superpower.

“These projects demonstrate Australia’s role as a world leader in renewable energy production, reducing the cost of hydrogen production and paving the way for exports,” he said.

ARENA CEO Darren Miller said the HyGATE Initiative brings together Australian innovation and state-of-the-art German renewable hydrogen technology.

“We’re excited to be able to announce the first four hydrogen projects we think best represent the possibilities of global collaboration to achieve a new export industry in renewable hydrogen and push us further towards the goal of net zero emissions,” he said.

Funding recipients have demonstrated their ability to deliver on one or more specified outcomes of the funding round, including:

Demonstrating highly innovative technology across the value chain of renewable hydrogen.
Reducing the cost of hydrogen production, transport, storage and use, and supporting the commercial viability of renewable hydrogen.
Developing an Australian-German supply-chain for renewable hydrogen.
Encouraging cross-country collaboration and knowledge sharing between Australian and German organisations.
Providing price discovery and transparency in relation to the current and projected economics for renewable hydrogen technologies.

ScaleH2 project

ScaleH2 brings together Australian energy infrastructure operator ATCO in partnership with Germany’s Fraunhofer Institute for Surface Engineering and Thin Films.

The project presents a pathway to the development of a 1 GW electrolyser and 800 ktpa ammonia facility in the Illawarra region of NSW.

German researchers bring expertise in electrolyser efficiency, coating and plate technologies and underground storage solutions.

ScaleH2 aims to develop and execute a strategy for a hydrogen export value chain from NSW to German customers.

CFE-Pilot project

Infographic: How Hysata's capillary-fed electrolysis cell works — How Hysata’s Capillary-Fed Electrolysis (CFE) cell works (Infographic: Hysata)

CFE-Pilot supports the demonstration of an innovative ‘capillary-fed’ electrolyser.

Australian hydrogen technology developer Hysata working with the Fraunhofer Institute for Production Technology will test the delivery of low-cost hydrogen in the Illawarra region.

The modular 200 kW electrolyser stack aims to achieve a high target efficiency of 95 per cent. The efficiency of a standard electrolyser is around 75 per cent.

The technology could see the overall, levelised cost of hydrogen cut below $2 per kilogram.

Hysata was spun out from the University of Wollongong where researchers, also supported by ARENA funding, developed the cell technology.

EGH2 project

EGH2 will deploy a 17.5 MW Siemens Energy electrolyser with 21 MW solar PV to produce renewable hydrogen for minerals processing and transport applications.

Australian renewable energy development firm Edify is negotiating an offtaker partnership which will demonstrate a strong level of innovation. The project also has the potential to impact the broader Australian-German supply chain.

The project will be delivered under a partnership between Edify Energy and Siemens Energy.

Solar Methanol project

Solar Methanol involves the development of a methanol production plant using concentrated solar power (CSP).

Australian solar thermal technology experts Vast Solar will develop the project in Port Augusta, South Australia.

The plant consists of a 10 MW electrolyser producing green hydrogen for solar methanol production.

It seeks to address emerging markets for sustainable shipping and aviation fuels, and also to power international industry and ensure domestic energy security.

Backing hydrogen

Graphic representation of the completed Yuri project. — Graphic representation of the completed $87 million Yuri renewable hydrogen project.

HyGATE is just the latest commitment in ARENA’s commitment to hydrogen. Over the past 10 years, ARENA has provided funding of $170.35 million to 44 hydrogen projects. More are in the pipeline.

In May 2022, Hysata reported its electrolyser breakthrough, which offers the prospect of producing hydrogen at $2 per kilogram. That would make hydrogen directly competitive with natural gas.

ARENA in September 2022 conditionally approved $47.5 million funding to build Australia’s first large scale renewable hydrogen plant. The $87 million Yuri project, led by global energy company ENGIE, will construct a 10 MW electrolyser and 18 MW of solar PV on the Burrup Peninsula in the Pilbara. Renewable hydrogen produced will supply the adjacent Yara Pilbara Fertiliser facility.

The funding is part of the $103.3 Renewable Hydrogen Development Round. The funding will support the Yuri project and two more 10 MW hydrogen electrolyser plants.

ARENA has also approved funding to Fortescue Future Industries for a FEED study for a 500 MW electrolyser at Gibson Island in Brisbane. The project would aim to fully decarbonise the existing Gibson Island ammonia plant owned by Incitec Pivot Limited (IPL).

And in December 2022, the ARENA-backed Central Queensland Hydrogen Project Feasibility Study concluded that a large -scale green hydrogen project in the Gladstone Region in Central Queensland could help launch a new low-carbon export industry for Australia.

How ARENA’s future will build on its past

A lot of water has passed under the bridge since the Australian Government, under the prime ministership of Julia Gillard, established ARENA on 1 July 2012 with a ten-year outlook and an original funding envelope of $3.2 billion, including $1.5 billion of existing funding from other initiatives.

ARENA’s purpose is to support the global transition to net zero emissions by accelerating the pace of pre-commercial innovation, to the benefit of Australian consumers, businesses and workers.

By the end of 2022, ARENA had provided $1.96 billion funding to 632 projects, worth a total of more than $8 billion.

Along the way there have been breakthroughs in solar energy, hydrogen production, new grid scale batteries and collaborations with industry.

A recent gathering in Canberra celebrated not only ARENA’s 10th anniversary but also that of the Clean Energy Finance Corporation (CEFC), established on 3 August 2012 . It was an event that brought together many former executives, current staff and politicians of various political hues.

Federal Minister for Climate Change and Energy Chris Bowen described the past decade’s work of both ARENA and the CEFC as “a great national achievement”.

“When you think about the successes,” Mr Bowen said, “the emissions reduction we have had [over the past 10 years] are in no small part due to the work of ARENA and the CEFC.”

Mr Bowen also outlined challenges ahead in pursuit of the Government’s targets of 43 per cent national emissions reductions on the 2005 level, and for renewable energy to hit 82 per cent of Australia’s electricity grid supply by 2030.

“It’s a big job,” he said. “When you think about 2030, it seems a long way away. It is closer to us than the anniversary we are celebrating tonight.”

How was ARENA born?

Founding ARENA CEO Ivor Frischknecht and former ARENA COO Nicola Morris

But while the atmosphere was one of celebration, it was also an opportunity to reflect on ARENA’s past and its tricky birth.

Ivor Frischknecht was ARENA’s first CEO, staying in the role until 2018. He compares the task of building ARENA in 2012 as trying to complete a difficult and dynamic jigsaw puzzle.

“The thing to understand is that ARENA is the collection of all the then existing government programs,” he said.

“So not only did we get a substantial funding allocation, but we also got a large number of projects and programs, many of which were not performing well or not being managed consistently.

“We not only had to set up a new agency from scratch, we also had to immediately start managing these projects, many of which had to be terminated or renegotiated.”

“So, it was a kind of a combination of a start-up and turn-around all at the same time.’

The early years

Previously working in venture capital, Mr Frischnecht recalls a “very intense” first couple of years and a steep learning curve in governance behaviour.

“Here you can’t just not return a call if you’re too busy,” he said.

“You have to return the call and you have to document decisions properly. It’s a very good discipline to have but it takes a while to pick that up,” he said.

Nicola Morris came to ARENA via a different route. “I was originally the head of the establishment committee back in 2011,” she said.

“That was responsible for drafting the legislation, putting in place the board, the executive and the operating model and the service level agreement.”

“And then I just kind of fell in love with the subject matter and decided to stay,” she said.

That period was defined by the minority Labour government under the prime ministership of Julia Gillard.

“We were one of 47 measures in the Clean Energy Future Package. So, we were born at the same time as the CEFC,” Ms Morris said.

“But of course, one of the other measures in the 47 measures was the carbon price, or carbon tax.”

“So those 47 measures were really intended to work together. But of course the carbon price didn’t survive, although, interestingly, both ARENA and the CEFC did survive.”

Nicola Morris left ARENA in 2014, after leading what was known then as “Big Solar”. She returned in 2016 as Chief Operating Officer until 2021.

Consistent objectives

Former Chief Scientist Dr Alan Finkel speaking at a lectern. — Former Chief Scientist Dr Alan Finkel: “Deep respect” for ARENA

While ARENA has faced challenges to its existence, Mr Frischnecht says it has remained consistent in its objectives.

“We were always very focused on getting the maximum return possible for a given investment,” he said.

“But the return was not thought of in necessarily a financial sense. Usually, it was thought of in terms of how quickly can we get to an answer? Does this technology work or not? How quickly can we get this new technology into the market? How quickly can we make it commercial in the sense that it is bankable?

“So, it’s about getting maximum bang for your buck, but in a way that is focused on the social benefit as opposed to the financial returns.”

That focus has been a real strength, says Alan Finkel, Australia’s Chief Scientist from 2016 to 2020, and now Special Adviser to the Australian Government on Low Emissions Technologies.

“A lot of other organisations have got a focus on the support for technology. The financing, government policy, things like that,” he said”

“But ARENA’s focus is just clear on helping to find the right trajectory to reducing price and improving the efficiency so that the technology gives us the best value for money. And I deeply respect that,” he said.

A standout ARENA milestone

Nyngan solar farm — The Nyngan 102MW output large-scale solar farm was in 2015 the largest in the southern hemisphere

Ivor Frischnecht says he is proud of an enormous amount of progress achieved during his six years at ARENA. But one event, first announced in July 2015, sticks out.

“The single thing that probably had the biggest impact was running the first solar auction in Australia,” he said.

“Large scale solar was not taking off in Australia because it was too expensive relative to wind. That was not the case overseas.

“We figured out that what they needed here was more volume to get over that initial hump, so that it could compete with wind.

“So what we did was we had a very deliberate program of a number of one-off projects. Quite expensive ones, like the AGL one, Morree solar farms, some of the early [projects]. And then we held an auction.

“So, people bid in for the minimum amount of subsidy from ARENA. And we thought we’d maybe have to do a couple of rounds, maybe three, but we only had to do one.

“And out of $100 million that we allocated to it, it went way further than we ever thought.”

According to Mr Frischnecht, that auction marked a milestone for solar generation, proving “just enough’ to kickstart the industry.

How is ARENA evolving?

Feat image — ARENA’s 10th anniversary celebration brought together (L-R) ARENA CEO Darren Miller, Minister for Climate Change and Energy Chris Bowen, ARENA Chairman of the Board Justin Punch.

There have, of course been many other highlights along the way, and lessons learnt. ARENA’s remit includes sharing knowledge gained through projects it supports. Both the successes and the failures.

Thousands of publications are available through the ARENA website, Insights Newsletter, ARENAWIRE blogs and newsletters. ARENA also organises and hosts events, including Insights Forums and Distributed Energy Integration Program (DEIP) Dive evnts.

Current ARENA CEO Darren Miller, who replaced Mr Frischnecht in 2018, says the agency is constantly evolving as renewable energy know-how advances.

“The energy transition is just that, it’s a transition, it changes,” Mr Miller said.

“Our strategy today would not have fitted 10 years ago. And the strategy from then would be irrelevant today because the challenges you come up against keep changing,” he said.

“Listening to the market is a key thing. We’re not the fount of all knowledge,” he said.

“With all the will in the world, we might see a technology that needs to come of age, but if the researchers aren’t focused on it or the market isn’t interested then it’s very difficult for us to succeed.

“So, it’s about good listening. It’s about collaboration with the industry, with researchers. And it’s about figuring out those next key steps in the energy transition where ARENA’s unique blend of skills and mandate can help accelerate that technology,” he said.

Which sounds like a strategy remaining true to the agency’s origins back in 2012.

Have your say on proposed Safeguard Mechanism reforms

The Federal Government has released proposed changes to the Safeguard Mechanism. The Government expects the reforms will cut Australia’s greenhouse gas emissions by a total of 205 million tonnes by the end of the decade.

That would be the equivalent of cutting total emissions from all Australia’s cars by two-thirds by 2030.

A consultation process on the approach to reforming the Safeguard Mechanism is now open until 24 February 2023. You can access a “Have Your Say” webpage.

The Government has set an overall 43 per cent emissions reduction target below the 2005 level by 2030, and net-zero by 2050.

The Safeguard Mechanism, introduced by the previous Government, currently applies to Australian industrial facilities that emit more than 100,000 tonnes of greenhouse gases annually.

It applies to more than 200 facilities, which must keep their emissions below a set baseline level of net emissions.

The changes are necessary, the Government says, because the current Safeguard Mechanism has been ineffective at driving emissions reduction. The Government says industry, business and experts have been calling for reform.

What is changing?

While the proposed reforms retain the baseline framework, changes include:

Reducing baselines by 4.9 per cent, each year.
Facilities will be able to earn “credits” if their emissions are below their baseline.
Facilities failing to meet their baseline obligations will need to buy either credits from low emitters, or Australian Carbon Credit Units (ACCUs) from the Government. If facilities fail to meet emission reduction targets and don’t purchase offsets, they will be fined $275 per tonne.
The price of one ACCU, representing one tonne of CO2-equivalent emissions will be capped at $75. That figure will rise in line with annual inflation plus 2 per cent year-on-year. ACCU’s spot price has peaked at more than $55 over 2022.
Set baselines for new facilities under the mechanism at international best practice, adapted for an Australian context.

How is ARENA funding industrial decarbonisation?

Industrial decarbonisation has been a focus for ARENA in recent years.

The Agency has provided more than $110 million to projects at 20 existing facilities captured by the Safeguard Mechanism. Facilities include fertiliser plants, alumina refineries, smelters, steelworks and mines.

In October 2022, ARENA provided funding for a front-end engineering and design (FEED) study to develop a 500 MW hydrogen electrolyser to decarbonise the existing Gibson Island ammonia plant owned by Incitec outside of Brisbane.

ARENA has also supported projects with Alcoa and Rio to switch to electric and hydrogen calcination in alumina refining.

In June 2022, a report by the Australian Energy Transition Initiative, funded by ARENA, outlined opportunities to cut industrial emissions by 88 per cent and create hundreds of thousands of jobs in key industrial hubs like Gladstone.

ARENA is currently supporting projects aiming to decarbonise industrial processes.

For instance, reducing emissions from metals production is a strategic priority, with a focus on steel and aluminium value chains. As well as supporting individual projects, ARENA helps fund major reports such as A Roadmap for Decarbonising Australian Alumina Refining, published in November 2022.

Beyond facilities captured by the Safeguard Mechanism, ARENA also currently offers up to $43 million funding under the Industrial Energy Transformation Studies Program. The program supports feasibility and engineering studies to reduce emissions and lower energy costs for facilities in mining, manufacturing, gas supply, water, waste management, agriculture, and data centres.

Solar research funding to drive costs lower

Thirteen research projects will receive a combined $41.5 million in funding to support activities that aim to significantly reduce the cost of solar.

Australian researchers regularly break world records for solar efficiency, and technology developed here is the basis for a majority of the world’s solar panels.

ARENA’s latest round of funding focuses on delivering Ultra Low Cost Solar (ULCS). That is, solar generated at about one quarter of the current price.

The target is called ‘Solar 30 30 30’. It aims to improve solar cell efficiency to 30 per cent and reduce the cost to 30 cents per watt, fully installed in the field. The target date is 2030.

Currently, efficiency records stand just below 27 per cent, while the installed cost is around $1.20 per watt.

ARENA CEO Darren Miller said the funding will go to some of Australia’s leading universities and researchers.

“Australia’s researchers have helped to make solar PV the cheapest form of energy in history,” Mr Miller said.

“But to create a future in which Australian solar energy supplies the world with clean power, fuels and products, we need to be ambitious and drive the cost even lower,” he said.

Backing Australian researchers

ARENA has awarded funding to researchers from three Australian universities: The University of New South Wales (UNSW), The Australian National University (ANU) and The University of Sydney (USYD).

Applications initially opened in February 2022 for $40 million funding. ARENA later added a further $1.5 million due to the strength of that first round of applications.

Successful applicants showed potential to reduce levelised solar PV costs and improve cell and module efficiency across two streams.

Stream 1 – Cells and Modules: Building on Australia’s leading track record of R&D and innovation in solar cells and modules ($27.5 million in ARENA funding);

Stream 2 – Balance of System, operations and maintenance: Seeking to broaden the approach to accelerate innovation that can drive down the upfront and ongoing costs of utility scale solar PV in the field ($14 million in ARENA funding).

Although much of the focus is on improving or developing new technology, there is also support for commercialisation beyond each project’s core research and development phase. With the ambitious 2030 target in mind, the funding includes assistance to develop products that can be offered into the market at scale.

“ARENA is supporting these universities to get behind the target of ‘Solar 30 30 30’, helping to optimise Australia’s transition to renewable electricity and achieve our emissions reduction targets,” Mr Miller said.

Accelerate worldwide development

Since 2012, ARENA through its R&D programs has committed $118.5 million in grant funding to 145 solar PV projects with 17 institutions.

ARENA last year boosted its funding support to the Australian Centre for Advanced Photovoltaics (ACAP) by $45 million. By 2030, ACAP will have received an expected total of $128.99 million in funding since 2012.

ACAP has fostered the spin-out of Australian solar start-ups such as Open Instruments, Solar Vision, Solar Cycle and SunDrive.

Professor Anita Ho-Baillie, the John Hooke Chair of Nanoscience in the University of Sydney’s School of Physics and Sydney Nano Hub, welcomed support for the university’s collaboration with SunDrive.

“Thanks to the support of ARENA, we are thrilled to be able to work with SunDrive to accelerate the development of perovskite-silicon tandems for commercialisation,” she said.

Deputy Head of School (Research) at the School of Photovoltaic and Renewable Energy Engineering UNSW Sydney Professor Bram Hoex, said he was humbled by the strong support from ARENA.

“ARENA’s ‘Solar 30 30 30’ target is perfectly aligned with our mission to accelerate the worldwide development and adaptation of renewable energy,” he said.

“This funding will allow us to continue to be in the driver’s seat of technology development and commercialisation with an increased focus on utility-scale solar, and so driving down emissions and growing the Australian economy at the same time.”

Alumina roadmap plots a path to slash Australia’s emissions

Australia is the world’s largest exporter of alumina. In fact, the industry contributes about $7.5 billion to the national economy every year.

But it is also very energy and emissions intensive.

Each year, Australia’s six alumina refineries, four in Western Australian and two in Queensland, use more than twice the energy consumed by the state of Tasmania. Alumina refining is responsible for up to 3 per cent of Australia’s annual emissions.

But transitioning alumina refining to renewables is not easy.

A major new report, A Roadmap for Decarbonising Australian Alumina Refining, confirms both the importance of alumina refining and its difficult path to decarbonisation.

Commissioned by ARENA with input from Australia’s three alumina producers, Alcoa, Rio Tinto and South32, and prepared by Deloitte, the roadmap says: “Four Key Decarbonisation Technologies have the potential to almost entirely eliminate alumina refining emissions in Australia.”

ARENA CEO Darren Miller described the roadmap as “an important call to action”.

“Decarbonising the alumina refining sector can further improve Australia’s international competitiveness, strengthen its position as a leading producer of low emissions alumina and aluminium and secure the jobs and economic benefits from the sector,” Mr Miller said.

Alumina Roadmap infographic — Click on the image to view an infographic summary of “A Roadmap for Decarbonising Australian Alumina Refining”

What is alumina?

There are three main steps in the aluminium production value chain:

Bauxite mining: Australia is the world’s largest of producer of bauxite. Alumina production uses more than 90 per cent of the world’s bauxite. In 2021 Australia produced just over 100 million tonnes of bauxite and exported almost 40 million tonnes.

Alumina refining: Refined alumina is an oxide of aluminium and looks like refined sugar or table salt. Australia is the world’s second-largest producer of alumina and its largest exporter. Alumina is mostly used to make aluminium but it also has many other uses such as glass, porcelain and paint manufacturing.

There are two key processes in an alumina refinery. Firstly, the Bayer process uses steam to extract alumina crystals from the bauxite. This consumes around 70 per cent of the energy used at the refinery. Secondly, a high-temperature calcination process removes chemically bound water from the alumina crystals. This consumes the remaining 30 per cent of energy.

Aluminium smelting: Australia is world’s sixth largest producer of aluminium. After iron and steel, it is the world’s most widely used metal with applications too numerous to mention.

Credible pathways to cutting emissions

Of the three stages, bauxite mining is by far the least energy intensive while aluminium smelting is the most, relying heavily on electricity. Emissions from aluminium smelting are expected to fall as Australia’s electricity grid transitions to renewable energy.

But alumina refining relies on fossil fuels to provide both heat and electricity. There are currently limited viable alternatives, which means the industry needs to look to innovate solutions.

The roadmap highlights credible pathways towards cutting emissions from alumina refining by up to 98 per cent.

The roadmap identifies four key technologies to reduce emissions.

Mechanical vapour recompression (MVR)

MVR replaces natural gas boilers for steam production in alumina refineries.

This process captures, recompresses and recycles waste steam that would otherwise vent to the atmosphere.

Renewable electricity powered MVR could reduce emissions in alumina refining by up to 70 per cent.

In May 2021, ARENA announced $11.3 million in funding to Alcoa to demonstrate the MVR technology at its Wagerup alumina refinery.

This $28.2 million project is a first-of-its-kind demonstration of MVR technology in Australia. If proven feasible, Alcoa will deliver a 3 MW MVR module, powered using renewable energy.

MVR could be ready to be for deployment from the late 2020s.

Electric boilers

Low temperature electric boilers are a mature technology that could be deployed at some refineries before 2030.

However, there is a caveat. According to the roadmap, “Electric boilers have higher operating costs than current fossil fuel fired boilers.”

“Access to low-cost renewable electricity or other financial support mechanisms are required to make this technology economically viable.”

Providing the necessary electricity supply infrastructure and fitting it into existing sites may prove challenging.

Hydrogen calcination

Hydrogen calcination replaces the combustion of natural gas in the calcination process with the combustion of hydrogen.

Combusting hydrogen with a stream of oxygen produces a pure steam exhaust. The Bayer process can capture and reuse that steam when combined with MVR.

Switching to hydrogen calcination will require cost competitive renewable hydrogen production at scale.

ARENA is providing $580,000 funding towards a feasibility study at Rio Tinto’s Yarwun alumina refinery in Gladstone. Launched in 2021, the study is examining the case for constructing a hydrogen pilot plant and the potential use of hydrogen at the refinery.

Rio Tinto is investigating replacing natural gas with hydrogen in the calcination process, and retrofitting hydrogen burners in its existing calciners.

Hydrogen calcination is seen as a longer-term prospect, which could be ready by 2035.

Electric calcination

Electric calcination replaces coal or gas powered calciners with electric calciners powered by renewable electricity.

Removing chemically bound water from the alumina crystals also produces pure steam. In combination with MVR, a refinery can capture and reuse that steam.

However, electric calcination is at a low level of technical maturity and will require significant support to commercialise with potential deployment from 2035 onwards.

In April 2022, Alcoa announced it will demonstrate electric calcination technology at its Pinjarra Alumina Refinery. ARENA is providing $8.6 million funding support to the $19.7 million project. The Western Australian Government is also contributing $1.7 million through its Clean Energy Future Fund.

This project is a world-first demonstration of electric calcination.

Alcoa’s main objective for the project is to demonstrate the technical and commercial feasibility of using electric calcination technology powered by renewable energy.

Call to action

Mr Miller says the roadmap provides a clear vision for decarbonising one of Australia’s most emissions intensive industries.

“Alumina refining has always been considered a hard-to-abate sector with significant barriers to reducing emissions,” he said.

“Now, we have Australia’s biggest alumina producers coming together with ARENA to develop a clear and credible pathway to reducing emissions in the industry.

“With just four key decarbonisation technologies currently in development to reduce nearly all emissions from Australian alumina refineries, what we need now is coordinated investment to accelerate the commercialisation of these technologies,” Mr Miller said.

Read the Roadmap for Decarbonising Australian Alumina Report.

Can Calix push steelmaking towards zero emissions?

As the world’s largest producer of iron ore, Australia is uniquely positioned to reduce emissions in steel production.

And that could make a big difference because steelmaking is responsible for more than seven per cent of global emissions.

If steelmaking could become an entirely electrified industry using renewable energy, those emissions could be cut to practically zero. But to get there, the steel industry must adopt transformative technologies that are only just being developed.

Reducing emissions from metals production is a strategic priority for ARENA, with a focus on the steel and aluminium value chains.

To that end, ARENA is providing $947,035 in funding to innovative Australian firm Calix to examine a potential low emission iron ore processing technology. The total cost of the combined pre-Front End Engineering and Design (FEED) study is $1.96 million.

It will evaluate the feasibility of using Calix’s proprietary Zero Emissions Steel Technology, aptly nicknamed ZESTY, to produce zero-emissions iron feedstock suitable for use in electric arc furnaces.

ZESTY process explained — How ZESTY works: click the illustration for an animated gif

Calix’s proposed demonstration plant will be capable of producing 30,000 tonnes each year of the feedstock material known as Hydrogen Direct Reduced Iron (HDRI).

Established in 2005m Calix now has global presence on four continents. The company helps develop environmentally friendly solutions for many emissions intensive industries, including agriculture, cement manufacture, and mining and mineral processing.

Why is steelmaking so emissions intensive?

Most of the world’s steel is made using blast furnaces (BF), and blast furnaces use coal. A lot of coal.

It supplies fuel, chemistry and the physical environment for turning iron ore into iron metal.

The process starts with metallurgical coal, converted to coke at 1000 degrees C.

Burning the coke heats the furnaces where it also provides some of the chemistry necessary to convert iron ore to iron. The coke also forms a bed for those reactions to happen.

Those extra roles mean electricity cannot simply replace coal as a source of energy for a blast furnace. Coal and coke are integral to the process.

A second stage, called a basic oxygen furnace (BOF), then converts the iron into steel.

Together, the two stages are commonly referred to as BF-BOF .

This process emits around 1.8 tonnes of CO₂ for every tonne of steel.

Are there alternatives?

The BF-BOF process has continually developed over the years, meaning modern furnaces operate close to efficiency limits. So, seeking modifications to significantly cut emissions is not a viable option.

Electric arc furnaces are a lower emissions alternative but have limitations.

Electric arc furnaces currently produce steel from two sources: recycled steel scrap and direct reduced iron (DRI).

DRI production converts iron ore in the form of solid pellets into iron. The process typically happens at high temperatures in a shaft furnace.

The problem with this from an emissions point of view is that DRI plants generally use natural gas to produce the reducing agents, carbon monoxide and hydrogen. It is both energy intensive, and the carbon monoxide eventually converts to CO₂ .

Gas-based electric arc furnaces emit around 0.7 tonnes of CO₂ per tonne of steel.

Can ZESTY provide the answer?

Hydrogen, on the other hand, reacts with iron ore to produce iron and water. Hydrogen produced by electrolysis using renewable energy is effectively zero emissions.

So, a direct reduced iron process, using only renewable hydrogen (HDRI), has the potential to eliminate natural gas. And, in combination with renewable energy powered electric arc furnaces, it could cut steelmaking emissions to zero.

To achieve that, ZESTY claims two advantages: it operates at temperatures approximately 1000 C below blast furnaces; it requires less hydrogen to convert the iron ore into iron.

How ARENA backs Australian innovation

ARENA CEO Darren Miller says ZESTY is a prime example of Australian innovation helping tackle global challenges.

“Decarbonising heavy industries like steel is both a big challenge and a big opportunity. ARENA is always looking to support companies like Calix that are developing potential solutions,” Mr Miller said.

“With abundant renewable energy resources and the world’s largest iron ore deposits, we have a unique opportunity to decarbonise an industry that is critical to the global economy.

“We’re looking forward to the outcomes of this study and hope to see ZESTY play an important role in the future of Australian iron and steel,” he said.
Calix Managing Director and CEO, Phil Hodgson said the project aims to further develop a homegrown Australian technology.

“The decarbonisation of iron and steel represents a unique opportunity for Australia. This project aims to further develop a homegrown Australian technology that we believe, together with Australia’s leading iron ore and renewable energy resources, can help make Australia a leading exporter of not just iron ore, but green iron and green steel.

The study is due to be completed in late 2023. It will inform Calix’s decision whether to proceed with the demonstration plant.

Australia’s first large scale renewable hydrogen plant to be built in Pilbara

Plans for one of the world’s largest renewable hydrogen plants are one step closer to reality.

ARENA has conditionally approved a grant of $47.5 million in funding to build a 10 MW electrolyser and 18 MW of solar PV in Karratha, WA.

The $87 million Yuri project led by global energy company ENGIE will use renewable electricity to produce hydrogen and supply it to the adjacent Yara Pilbara Fertiliser facility.

Yara’s plant in the Burrup Peninsula is Australia’s largest ammonia production facility.

Hydrogen is used to produce ammonia, which in turn is a vital ingredient in all nitrogen fertilisers. Currently, ammonia production uses hydrogen derived from fossil fuels.

This first-of-its-kind project will produce green hydrogen via electrolysis from renewable energy.

The project is expected to start construction in October 2022 and be completed by early 2024.

Once completed, Yuri will be Australia’s largest electrolyser, capable of producing up to 640 tonnes of renewable hydrogen each year.

Renewable hydrogen and ammonia

Industrial processes such as oil refining, steel making and ammonia production use hydrogen extensively.

Today, around 98 per cent of the world’s industrial hydrogen production relies on fossil fuels.

Ammonia production accounts for between 70 to 80 per cent of industrial hydrogen use. It also accounts for some 500 million tonnes of CO₂ emissions each year, or 1.8 per cent of global emissions.

To put that into perspective, that’s equivalent to the emissions of the aviation industry. If ammonia were a country, it would be the world’s 16th largest emitter, right between South Africa and Australia.

Graphic representation of the completed Yuri project, adjacent to the exist Yara Pilbara Fertiliser plant (Supplied by ENGIE)

The most common, and cheapest method of producing hydrogen is via a process called steam methane reforming. Natural gas (methane) reacts with high pressure steam to produce hydrogen plus, at the end of the process, CO₂.

Renewable hydrogen is created through a process called electrolysis, which splits water into its molecular elements, hydrogen and oxygen.

While electrolysis is an energy intensive process, when powered by renewable energy it creates emission-free hydrogen. In the case of the Yuri project in sunny Western Australia, that renewable energy will come from solar panels. Lots of them.

The renewable hydrogen will pipe directly into the neighbouring Yara fertiliser plant. Yara is currently largest producer of ammonia, capable of supplying around five per cent of global traded volumes.

Initially, the renewable hydrogen plant will supply about 1 per cent of Yara’s ammonia output. The aim, if the trial is successful, is to switch the plant to 100 per cent renewable hydrogen. The resulting 100 per cent renewable ammonia output will help decarbonise fertilisers, or become a future export commodity

Hydrogen superpower

Renowned economist and author of Superpower: Australia’s low-carbon opportunity Professor Ross Garnaut recently told ARENA’s Rewired podcast that not only will renewable hydrogen play a “very large role in many areas of decarbonisation,” but the opportunities for Australia could be game changing.

“The big industrial countries of the Northern Hemisphere China, Japan, Korea, Germany, are beginning to realise that hydrogen will be the root of decarbonisation,” Professor Garnaut said.

“It’s going to be very difficult for them to produce enough hydrogen at low cost to do it themselves. And so, importing hydrogen or importing processed zero-emission materials is going to be the way that they decarbonise their industries,” he said.

ARENA CEO Darren Miller described the Yuri project as an important step in Australia’s journey to become a major exporter of renewable hydrogen.

“Whether it’s for decarbonising fertiliser production, or for use as a zero emissions fuel, renewable hydrogen will be vital to reducing emissions in so called hard-to-abate sectors,” he said.

“It is also a huge export opportunity for Australia to provide clean energy and emissions free materials.”

Speaking from the Yara site, Mr Miller said: “I hope and expect that in the years ahead we’ll be building many gigawatts of hydrogen electrolysers all around the country. If this comes to pass then I believe we will look back at days like today and realise just how significant this project is.

You can’t build a 1 gigawatt electrolyser unless you’ve built 100 MW. And you can’t build 100 MW unless you know you can build 10 MW. And to date the largest electrolyser we’ve build in Australia is just over 1 MW in Tonsley, SA. So this 10 MW electrolyser is truly significant and very important in this journey.”

Renewable Hydrogen Development Funding Round

Yuri is the first project to reach the construction stage as part of ARENA’s competitive funding round to build Australia’s first renewable hydrogen plant.

November 2019 – ARENA announces a $70 million funding round to help fast track the deployment of renewable hydrogen in Australia.
March 2020 – Opening of formal applications for the round.
June 2020 – ARENA receives Expressions of Interest worth more than $3 billion in combined total project value.
July 2020 – ARENA announces seven shortlisted projects that are invited to submit full applications.
May 2021 – ARENA announces conditional approval for three projects, sharing $100 million for electrolyser projects. Funds were raised to $100 million by ARENA’s Board due to the high merit of the three projects.

ARENA has previously committed over $88 million to renewable hydrogen projects spanning feasibility studies, small scale electrolyser demonstrations, gas blending trials and hydrogen vehicle projects.

“The Yuri project is exciting because fertiliser production is a significant existing end use for hydrogen and one where we can make an immediate difference because we are replacing fossil fuels with renewable energy to make hydrogen,” Mr Miller said.

“As the largest hydrogen project of its kind so far in Australia and one of the largest in the world, this project will help us understand the opportunities and challenges for producing renewable hydrogen at scale, offering valuable insights into the technical complexities, economics and supply chain considerations for future commercial scale hydrogen electrolyser projects in Australia.”

“This is going to be important if we are to achieve zero net emissions in the decades ahead.”