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Renewable-fossil hybrid generation

In the short term, ARENA has no specific investment focus on proposals that are aimed at integrating renewables into existing large-scale generators.

However ARENA remains interested in, and will continue to support, high merit hybrid activities that can demonstrate benefits beyond those identified through ARENA’s current portfolio of hybrid projects.


ARENA’s assessment of renewable-fossil hybridisation in existing large-scale generators is informed by expert analysis undertaken by Parsons Brinkerhoff and feedback from stakeholder workshops held in 2013, updated to reflect recent market conditions.

Note that this assessment refers only to utility-scale renewable-fossil hybrid electricity generation. Smaller-scale hybridisation (such as solar-diesel systems) is covered in the Fringe-of-Grid and Off-Grid assessments.

How is ARENA involved with renewable-fossil hybrid generation?

Likely scale and potential for growth by 2030-2040

ARENA views hybridisation as a transitional step in the transformation of the energy supply mix. Hybridisation assists the transition by building electricity generators’ knowledge and experience of renewable energy technologies, and by demonstrating that utility-scale renewable energy can be generated at a lower cost than standalone renewable plants by utilising existing infrastructure.

The incorporation of renewables into the thermal cycle of existing electricity generators requires the augmentation of existing assets and can involve significant capital investment. However it can also pay off in higher plant capacity or efficiency.

The market size for utility-scale hybridisation in Australia is limited to those generation assets that have expected lifetimes long enough to justify additional capital expenditure. In the longer term this will also depend on the amount of new generation capacity brought on-line in Australia.

ARENA commissioned Parsons Brinkerhoff to explore the opportunities for renewable hybridisation in Australia[1]. ARENA also held stakeholder workshops to discuss the methodology of the report, and to gauge the appetite for a hybrids investment program by ARENA.

Figure: Parsons Brinkerhoff screening and shortlisting process

The study found that biomass, solar thermal and geothermal technologies could be integrated into the thermal cycle of existing power stations and had the potential for deployment across Australia. 18 plants were identified as suitable for a hybrid project on the basis of cost and resource availability.

Investment influence

The sentiment from the stakeholder workshops was generally positive towards hybridisation; however stakeholders commented that current market conditions (such as policy uncertainty and low wholesale electricity prices) were not conducive to new investment.

ARENA’s ability to influence commercialisation of renewable hybrids is therefore constrained until electricity market conditions and sentiment become more favourable.

Gap in ARENA portfolio

As at June 2015 ARENA had funded one utility-scale hybridisation project and two feasibility studies comprising over $38m in grant funding.


ARENA’s investment focus on hybrid applications has been on overcoming technical barriers and increasing certainty of project costs and expected revenues through feasibility studies and pilot scale projects. However there is a limited market for renewable-fossil hybrid deployments in Australia over the long term (to 2040).

ARENA’s ability to influence the long term competitiveness and supply of renewable-fossil hybridisation in Australia is limited compared to other applications of renewable technologies. ARENA’s existing hybrid projects are still in progress and yet to demonstrate technical and knowledge sharing benefits.

As a result, ARENA has no immediate investment focus on proposals involving hybridisation at utility scale.


[1]Hybridisation of Fossil Fuel Energy Generation in Australia’, November 2013.