1. The role of Government in improving the competitiveness of renewable energy technologies and increasing the supply of renewable energy in Australia
Solar Power 2013
19 February 2013

2. Summary
Assisting relatively mature solutions to bridge the commercialisation gap by contributing to project financing
Supporting off-grid applications of renewable energy
Developing industry learning and capabilities through an ongoing pipeline of projects for widespread deployment of renewable energy
Reducing barriers to renewable energy technology deployment by sharing project information and learning, and increasing awareness and acceptance of the technologies
Australian renewable energy landscape
Solar landscape
Policy drivers
ARENA strategy and investment plan
Investment highlights. 1.

3. 1. The Australian Renewable Energy Landscape2.

4. Renewables in Australia’s energy mix
Australian Electricity Generation
Source: ABARES, Australian Energy Statistics (2011) 3.

5. Source: CCA Discussion Paper Oct 2012
Australia’s renewable energy mix
This diagram shows Australia’s current mix of renewable generation capacity including bagasse, landfill gas, solar, wood waste, wind and hydro and the percentage of installed capacity for each between
Source: CCA Discussion Paper Oct 2012 4.

6. Location of renewable energy capacity
Source: BREE (2012) Energy in Australia 2012 5.

7. Changing mix of Australia's energy demand
Australian Primary Energy Consumption By Sector: 2012/3 – 2034/5 (PJ)
Proportion of total in 2012/3
Proportion of growth 2012/3- 34/5 5% 2%
29%
50%
21%
-2% 5%
88% 2% 6%
38%
-45%
Sources: “Australian Energy Projections: December 2012”, BREE, 2012 6.

8. 2. The Solar Landscape 7.

9. Australia’s Renewable Resources: a Track Record of Innovation
Source: Professor Stuart Wenham, China: Threat or Opportunity? (2012) 8.

10. Compared to major solar markets, Australia is sunny9.

11. Solar in Australia’s 2050 electricity mix
Source: BREE (2012d)
10.

12. Source: BREE, Australian Energy Technologies Assessment 2012
Levelised costs in 2012 and 2020 – Photovoltaic, Concentrating Solar Power, Gas
Source: BREE, Australian Energy Technologies Assessment 2012
11.

13. LCOEs for renewable energy technologies - 2012
Levelised energy costs in 2030
This slide shows the forecasted Levelised Costs of Energies (LCOE) across renewable and non-renewable energy technology in 2030.
Source: BREE, Australian Energy Technologies Assessment 2012
12.

14. Progress across the full set of costs is required to increase commercial viability and deployment
LCOE Drivers
Solar Device
Other Hardware, Civils, Install, Land, O&M
Finance
Channel Margins
PV LCOE now <$200MWHr
Local costs
70-80% of employment in these areas
Global costs
Technology
IP key value
13.

15. Solar innovation chain – key challenges
TECHNOLOGY PUSH
MARKET PULL
IMPACT
Research
Development
Demonstration
Deployment
Pilot
Scale
Commercial
Scale
Supported
Commercial
Competitive
Commercial
Imagining
Incubating
Demonstrating
Promoting
Sustaining
Proving it Works
Higher Efficiency
Lower Cost Materials & Components
Thermal & Chemical Storage
Control Strategies – Demand side management, resource forecasting
Securing Capital
Lower Technology Risk
Proof of Cost
Supply Chain Development
System Integration – improving capacity factors & Yields
Manufacturing Process Improvement
O&M track record
Proving cash flows
Project Finance & Revenue Certainty
Maximising NPV
Forecasting, storage, PPA terms
Capturing PPA value in uncertain markets – carbon, regulation, ownership structures etc
Cost of ownership, permitting, social acceptance, skills availability etc
14.

16. $$$ Unlocking the capital Commercial viability
Debt &
Equity
Commercial viability
Upfront costs vs. long-term revenues
Highly sensitive to cost of finance
Bankable PPAs at market value
Technology risk (CSP)
Long-term nature of R&D
Funding the cost of proving its “bankability”
Market
Policy stability
Variation between jurisdictions
People and skills
Market
Commercial Viability
Technology Risk
15.

17. 3. Policy drivers
16.

18. Source: Treasury modelling, 2011 (medium global action scenario)
Australia’s targets - projected growth in emissions and the abatement challenge
Source: Treasury modelling, 2011 (medium global action scenario)
17. 18

19. Australian Government support for renewable energy technology development
18.

20. ARENA - objectives
The basics
19.

21. 4. ARENA’s Strategy and Investment Plan
20.

22. ARENA - objectives
The basics
$3.2 billion in funding
21.

23. Strong foundations
22.

24. Doing business
23.

25. General Funding Strategy
GENERAL PRINCIPLES
COMPLEMENTARITY
CONFIDENCE BUILDING
DIVERSITY
ALONG THE WHOLE INNOVATION CHAIN
RESEARCH (basic and applied)
DEVELOPMENT
DEMONSTRATION
COMMERCIALISATION
INVESTMENT PLAN
STRATEGIC INITIATIVES
SUPPORTING INITIATIVES
COMPLEMENTARY INITIATIVES
24.

26. Investment Plan STRATEGIC INITIATIVES
are larger in scope and scale and typically fund market-oriented, near commercial, demand pull projects
Regional Australia’s Renewables
Deploying utility scale renewable energy
SUPPORTING INITIATIVES
more limited in scope and address specific roadblocks to the success of a strategic initiative
Removing roadblocks for regional and remote renewable energy
Building Australia’s next generation solar
COMPLEMENTARY INITIATIVES
provide ARENA with the flexibility to do those things necessary to fulfil all of its functions
Supporting High value Australian Renewable Energy knowledge (SHARE)
Continuing programs such as ERP and REVCF
25.

27. Regional Australia’s Renewables
PROPOSED OUTCOMES
At least 50 MW of renewable energy capacity installed by 2020
2 x
10 MW or more renewable energy systems by 2018
Roadblocks removed. Trained operators of renewables
Industry
Size
Type of Support
Location of projects
Community
100kW – 1MW
Grants - capital subsidy
Off-grid
Roadblocks
No size
Grants – project costs
Focus on - system issues, demand management, control systems, storage optimisation etc
1MW or more
Grants - capital / or revenue subsidy
Off-grid or fringe-of-grid
26.

28. Demand for Off-Grid electricity is large in the minerals & energy sector
WA Forecast Increased Minerals And Energy Electricity Demand By Source (GWh per annum, incremental above 2012 levels)
95% of new energy demand expected to be provided off-grid
Sources: “WA State Growth Outlook 2013”, PwC 2012
27.

29. There are successful Case Studies of renewables in the mining industry
Sources:
Remote Miners Investing in Renewables to Power Operations”, Renewable Energy World 2012, accessed at: ARENA analysis
28.

30. 5. Investment highlights
29.

31. $650 million in investments
30.

32. CS Energy Kogan Creek Solar Boost Project
$A34.9m funding for $A104.9m project
The project will be the world's largest
solar integration with a coal fired
power station.
44 MW solar thermal addition to the
existing 750MW Kogan Creek Power Station in South West Queensland.
AREVA Solar's CLFR technology.
30 hectare solar field.
Operational in 2013.
31.

33. Solar Energy Management (SEM) system for utilities
CSIRO, Ergon Energy, GWA Group $A0.2m funding for $A0.6m project Combines CSIRO’s thermally-driven residential desiccant solar cooling technology with a novel SEM system and natural gas-powered back-up to reduce peak electrical consumption from the grid with certainty while providing continuous operation of air-conditioning. The SEM technology will be tested in 3 residential buildings to verify its ability to address grid stability issues and test customer acceptance as “winx3” for the environment, consumers and utilities.
32.

34. Other Opportunities Current funding opportunities through ARENA:
$126 million Emerging Renewables program
$200 million Southern Cross Renewable Energy Fund
Coming up:
PhD Scholarships and Postdoctoral Fellowships
Regional Australia’s Renewables program 33