Government Funding Renewable Energy
Following policy uncertainty, the Australian government has made a series of announcements in recent weeks that set the direction for the energy transition.
Government Funding Renewable Energy
Together, the key aspects of the announced plan are investment in advanced technologies, the development of natural gas as an alternative fuel and the capitalization of the Australian Renewable Energy Agency (ARENA), as outlined in Low Emissions Technology Statement released last September. .) and the Clean Energy Finance Corporation (CEFC) promote the development and investment of advanced technologies.
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This is a welcome development for investors in the energy transition looking to identify policy stability and the systemic issues that have led to large investment declines over the past 24 months.
This week, the Government released the delayed budget for 2020-21. The burning question for investors is how these announcements are reflected in the budget priorities.
The transition to low emission technology is encouraged by the innovation and renewal of ARENA and CEFC.
As expected, the budget approved $1.9 billion over 12 years in 2020-2021 to support research, development and investment in five technologies, including clean hydrogen, energy storage, steel and aluminum, acquisition and carbon storage, and soil carbon.
File:figure 2 Obligated U.s. Government Funding For Clean Energy Cooperation With China, By Fiscal Year, 2008–2015 (28102751703).jpg
The budget also allocates $1.4 billion of that over the 12-year period of ARENA, primarily investing in research and development of technologies related to low-emission technologies.
To implement this directive, ARENA will expand its investment mandate and oversee the deployment (with the Clean Energy Administrator) of a portion of the $2 billion Climate Solutions Fund (formerly the Energy Reduction Fund). Detailed information on this issue has not yet arrived.
Like ARENA, the CEFC will expand its mandate to facilitate investment in low-emission technologies and will no longer require half of its investments to be in renewable energy.
According to the Low Emissions Technology Statement, the Government provides little direct funding for gas recovery and renewable technologies.
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Although part of its energy policy is based on the gas recovery plan, most of the money is spent on accelerating the development of new and innovative technologies such as hydrogen and carbon capture (see the table in below).
However, an additional $134.7 million has been allocated to fund distributed generation and reliable energy supply. This can also be seen in the context of the budget investment of $1.5 billion over five years to support the Modern Manufacturing Strategy, which the Government envisions in the short to medium term for gas supply.
Direct investments in renewable energy are not allocated, the VNI West project connecting Victoria and New South Wales, the EnergyConnect project (between South Australia and New South Wales) and the Marinus Link project (connecting Tasmania and Victoria) worth $250 million. dollar. ) is an important step to build transmission infrastructure and build system capacity and allow more renewable energy projects to be connected to the grid. It also helps address a key barrier to investment in the industry.
In addition, the CEFC continued its mandate to manage the $1 billion Grid Reliability Fund. To be eligible for this funding, a project must fit into one of the following categories:
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An unspecified amount has also been earmarked to upgrade the coal-fired Vales Point power station, where the government aims to have enough “distributed” supply to the electricity grid to pay for the upcoming retirement of Liddell power. station.
A common theme in the energy sector’s initial comments on the budget was the lack of funding available to help businesses integrate new transportation technologies, with $74.5 million over four years to support the electrification of transportation. electric vehicles and charging infrastructure and $5 million for the manufacture and assembly of electric vehicles in South Australia.
Perhaps consistent with lowering its emissions targets, the Government has yet to determine whether budget funding for the Low Emissions Technology Statement will help Australia meet commitments under the Paris Agreement to reduce greenhouse emissions gas. The percentage is below the 2005 level.
However, given the priority technologies supported by the Low Emissions Technology Statement, it is unclear how Australia’s obligations under the Paris Agreement will be mitigated or enhanced.
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In addition, in the context of the 2020 fires, $1.8 billion in 5 years is an underinvestment in environmental protection.
The government has already shown its reluctance to meet the zero oil target in this budget and will not provide anything to support it.
Create the Future Fuels Fund to integrate new vehicle technologies into businesses, conduct integration analysis, and develop better data on electric vehicles and charging infrastructure.
Establish a joint investment fund that supports industrial, trucking and agricultural businesses in identifying and adopting emission reduction technologies.
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Establish a Commonwealth Carbon Sequestration Development Fund to study reductions in power generators.
Expansion of local and remote communities trust fund to support pilot research on microgrids in local and remote areas
Improve energy and emissions data analysis, tools and reporting to better support the government’s commitment to affordable and reliable energy.
Support gas recovery that opens up the gas supply, ensuring efficient pipelines and transmission markets, and empowering gas consumers, including the creation of a National Gas Infrastructure Plan.
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Investment in new diesel fuel storage facilities, including a competitive grant program to support the construction of new diesel fuel storage facilities.
Support collaborative research projects through the Collaborative Research Center Projects Program to develop solutions for recycling and reusing plastics, paper, tires and other materials.
Continue to work with state and territory governments to develop priority energy reforms approved by the National Cabinet and deliver the National Electricity Market design process by 2025.
Employers in the service industry should be aware of a recent decision by the Federal Court of Appeal (FCA) regarding tips generated through electronic point-of-sale systems.
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Prime Minister Trudeau announced that Canada will celebrate the death of Queen Elizabeth II. The holiday will be held on Monday, September 19, the day of the Queen’s funeral in the United Kingdom. Clean energy leaders around the world are calling on the Australian government to support funding for renewable energy projects after proposals from both sides of the political spectrum would block the Australian Renewable Energy Agency from financing future renewables.
The Liberal and Labor parties in Australia have proposed reducing or eliminating the funding capacity of the Australian Renewable Energy Agency (ARENA) for renewable energy projects. The Australian Clean Energy Council (CEC) said in late August it would defend ARENA’s renewable energy portfolio, confirming that “legislation to be introduced in Parliament this week includes a $1 billion cut in subsidy funding”. He took the risk.
Following its petition, the Clean Energy Council this week published an open letter signed by an impressive list of global clean energy leaders calling on the Australian government to protect ARENA funding.
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“If one of the first steps in the new parliament is to cut funding to Australia’s main clean energy agency, investment confidence will plummet again. This will damage Australia’s reputation and anger those investor,” the letter said.
“Clean energy is one of Australia’s best opportunities for jobs, growth and innovation. ARENA’s ability to deliver new grant programs is threatened by legislation before the Australian Parliament that would reduce fix its future funding. At the same time, we respect the financial challenges facing the government Folks, we believe that cutting the ARENA budget would be short-sighted.”
Among its signatories are Australian utilities such as AGL and Hydro Tasmania, as well as global clean energy companies such as Canadian Solar, First Solar, Gamesa and Vestas. (The full letter can be found below.)
The Clean Energy Council says up to $1.3 billion in ARENA funding is now at risk under the federal government’s proposed omnibus bill, which would further limit financial support for renewable projects. energy across Australia. and hinders the development of an important new energy sector.
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“The innovations funded by ARENA today are driving the economic engines of tomorrow. The grants awarded by the agency are small investments that lead to future jobs and investments,” said Kane Thornton, president of Clean Energy Council. “Hundreds of projects have been funded so far and hundreds more are needed as we continue to transform Australia’s energy system at the most affordable cost for consumers.”
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