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Australian Government Policy Drivers for Renewable Energy

Development

Presented by John RooneyManager – Industry, Energy and Environmental Policy Section

Industry and Small Business Policy DivisionDepartment of Innovation, Industry, Science and Research

11 June 2010

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The government’s approach• In June 2009 the government signed the OECD’s declaration on

Green Growth • Mandates the development of a Green Growth Strategy intended

to “achieve economic recovery and environmentally and socially sustainable economic growth”

• Believes a Carbon Pollution Reduction System(CPRS) with a price on carbon is the cheapest and most effective way

• Committed to bipartisan support so will not move to legislate until at least 2013

• Greenhouse gas reduction targets remain unchanged• Boosting investments in clean and renewable energy as well as

energy efficiency

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Renewable Energy Target Department of Climate Change and Energy Efficiency

• Designed to ensure 20% of our electricity supply comes from renewable sources by 2020

• Split into small-scale and large-scale • Small-scale renewable energy scheme – designed to

deliver households, small business and community groups $40 for each Renewable Energy Certificate created by small-scale technologies

• Large-scale renewable energy scheme – ensures the market for large-scale projects so they can grow free from uncertainty

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Renewable energy in Australia

Source: AERA, 2010

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Role of the Department of Innovation, Industry, Science and Research

• The government believes that the best approach is through innovation, research and development

• DIISR participates in areas such as clean technology, enabling technology, green skills, ‘green’ research and development and eco-innovation

• Australia is a leading innovator in renewable energy technology: CSIRO’s Energy Transformed Flagship

• The challenge for Industry Policy is to ensure that more of these innovations are commercialised in Australia – to grow Australian Renewable Energy manufacturing Industries

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Energy Transformed FlagshipCSIRO

• Responding to environmental and efficiency challenges facing the energy sector• Virtual Power Station

– linking dispersed renewable energy generation and storage systems to create a single ‘virtual’ power station to feed into the electricity grid

• Mini Grids– developing advanced control techniques for electricity networks allowing

greater penetration of renewable and low emission energy• Second Generation Biofuels

– developing second generation biofuels obtained from lignocellulose with a particular focus on conversion processes.

• Solar Brayton Cycle demonstration field– world’s largest solar tower Brayton Cycle system

• Ultrabattery– hybrid energy storage device made up of a supercapacitor integrated with a

lead–acid battery cell provides a solution for future energy storage needs

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Renewable Energy Equity FundDepartment of Innovation, Industry, Science and Research

• Provides venture capital and managerial advice to small, innovative renewable energy companies

• Includes companies commercialising direct or enabling renewable energy technologies and services

• Sources of renewable energy include sun, wind, geothermal sources, biomass not derived from fossil fuels, mini- or micro- hydro systems, waves, tides and the ocean

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R&D Tax Concession/CreditDepartment of Innovation, Industry, Science and Research

• Encourages Australian industry to undertake R&D activities

• Aims to increase international competitiveness by encouraging innovative products and services

• From 2010-11 the R&D Tax concession will be simplified to the R&D Tax Credit

• Provides a 45% refundable credit for firms with turnover of <$20million, 40% for firms >$20million

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Clean Business Australia Department of Innovation, Industry, Science and Research

• Climate Ready Program– Competitive grants program– $50,000 to $5million on a matching fund basis– Supports early stage commercialisation activities to develop

solutions to climate change challenges• Re-Tooling for Climate Change

– Grants of $10,000 to $500,000, up to half the project cost– Helping manufacturers reduce their environmental footprint,

improving energy or water efficiency• Green Building Fund

– Grants of $50,000 to $500,000, up to half the project cost– Aims to reduce greenhouse emissions by reducing the energy

consumed in operations of existing commercial office buildings

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Green Car Fund Department of Innovation, Industry, Science and Research

• $1.1 billion fund• For projects that enhance the research and

development and commercialisation of technologies that significantly reduce fuel consumption and/or greenhouse gas emissions

• $1 government funding for $3 of private funding

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Transport Fuel GrantsDepartment of Innovation, Industry, Science and Research

• Ethanol Production Grant

– Eligibility-based to encourage the use of biofuels in transport

– Producers are paid 38.143 cents per litre

– Eligible ethanol must be made entirely in Australia from biomass feedstock

• LPG Vehicle Scheme

– Grants scheme for LPG conversion of a motor vehicle or purchase of a new vehicle fitted with LPG

– Grant amount starts at $1,750 for conversions completed by 30 June 2010

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Clean Energy Innovation CentreDepartment of Innovation, Industry, Science and Research

• Part of the Enterprise Connect Network• Eligible businesses receive a business review at no charge • Tailored Advisory Services Grants with $1 government

funding for every $1 of eligible expenditure by the business• Eligible business may be involved in

– Generation of renewable and low carbon energy sources– Solar hot water, desalination and water efficiency– Equipment and technologies to increase energy efficiency

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Further policies of the Department of Innovation, Industry, Science and Research

• Clean Technology Supplier Advocates – provide leadership to Australian businesses that manufacture and

produce environmentally-friendly technologies – Professor Andrew Parratt

• Innovation Investment Fund– a venture capital program that supports new innovation funds and

fund managers with expertise in early stage venture capital investing

– Clean Tech Australia Fund Management Partnership in Sydney and OneVentures in Melbourne

• Future Manufacturing Industry Innovation Council– leaders in innovation from business, the science and research

communities, unions, professional associations and the Australian Government

– focus is manufacturers using advanced processes, materials and technologies

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Clean Energy Trade and Investment Strategy

Austrade

• Connect Australia’s clean energy and technology sector with commercial opportunities

• Contribute to industry development through trade and investment

• Target markets with advanced technology and capital, especially North America, Western Europe and North East Asia

• Export and outward investment will grow as domestic capability expands

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Renewable Energy Future FundDepartment of Climate Change and Energy Efficiency

• On 11 May 2010 the government announced they will commit a further $652.5 million over four years to establish a Renewable Energy Future Fund

• Brings total investments in renewable and clean energy and energy efficiency to over $10 billion

• Delivered through a number of departments and agencies

• Priorities and progress is coordinated through Department of Climate Change and Energy Efficiency

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CCS Flagships(and associated support)

Australian Centre for Renewable Energy (and associated support)

Solar Flagships (and associated support)

Overall funding $2.4 billion $0.56 billion $1.6 billion

ACRE funding: $567 million Flagships: $1,500 millionSolar Institute: $100 million

Flagships: $2000 millionNLECI: $400 million

Components

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Australian Centre for Renewable Energy (ACRE)

Department of Resources, Energy and Tourism

• Objectives: promote the development, commercialisation and deployment of renewable energy and enabling technologies to improve competitiveness in Australia

• Central contact for the government• Focus on building on the research and development

funded through other bodies

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ACRE’s Renewable Energy Demonstration Program

Department of Resources, Energy and Tourism• MNGI Pty Ltd - $62.762 million

– engineered geothermal system project, based on Petratherm's 'Heat Exchanger Within Insulator' model

– will provide a sound foundation upon which to underpin the large-scale development geothermal energy

• Geodynamics Limited - $90.000 million– demonstrate the potential for hot-rock geothermal energy to be a

major generator of zero-emission, base-load power– world's first multi-well hot fractured rock power project

• Victorian Wave Partners Pty Ltd - $66.465 million – first commercial scale ocean energy project in Australia

• The Hydro-Electric Corporation (Hydro Tasmania) - $15.280 million – demonstrate the potential for enabling technologies to help integrate

renewable technologies into established electricity networks and mini-grid systems in remote areas

– integrate wind, solar and storage with a biodiesel generator to provide baseload and peak power for the King Island mini grid system

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ACRE’s Advanced Electricity Storage Technologies Program

Department of Resources, Energy and Tourism

• Wizard Power (ACT) – $7.4 million to demonstrate a solar energy storage system based on

ammonia dissociation and reassociation into hydrogen and nitrogen • Lloyd Energy Systems (NSW)

– $5 million to demonstrate a solar thermal energy storage system involving concentrated solar energy and graphite blocks

• ZBB Technologies (NSW) – $3.1 million to demonstrate an integrated zinc-bromine flow battery

at CSIRO’s National Solar Energy Centre in Newcastle • RedFlow Pty Ltd (QLD)

– $1.113 million to demonstrate the viability of zinc bromine batteries in maximising on grid and fringe of grid solar photovoltaic systems

• Smart Storage Pty Ltd trading as Ecoult (NSW) – $1.82 million to demonstrate an UltraBattery system located at the

end of an 11 kV rural grid attached to a 660kW wind turbine at Hampton NSW

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ACRE’s Second Generation Biofuels Research and Development

Department of Resources, Energy and Tourism

• The University of Melbourne ($1.24 million)– biofuel from Micro algae involving the efficient separation, processing and utilisation

of algal biomass• Algal Fuels Consortium ($2.724 million)

– pilot-scale second generation biorefinery for sustainable micro algal biofuels and value added products

• Curtin University of Technology ($2.5 million)– sustainable production of high quality second generation transport biofuels from

Mallee biomass by pyrolysis and utilising the biorefinery concept• Bureau of Sugar Experiment Stations ($1.326 million)

– an optimised and sustainable sugarcane biomass input system for the production of second generation biofuels

• Monash University ($1.383 million)– develop a pyrolysis biorefinery

• Microbiogen Pty Ltd ($2.539 million)– produce commercial volumes of ethanol from bagasse using patented yeast strains

• Licella Pty Ltd ($2.288 million)– commercial demonstration of Lignocellulosics to stable bio-crude

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Other programs of the Australian Centre for Renewable Energy

• Geothermal Drilling Program Department of Resources, Energy and Tourism

– $50million program provides assistance to develop geothermal energy projects, drilling geothermal wells

– Seven firms were announced to receive funding in 2009• Wind Energy Forecasting Capability Program

Department of Resources, Energy and Tourism

– $14million to support the development and installation of software and systems for effect forecasting on wind energy generation

– Funding concluded on 30 June 2009, some work continues into 2010

– Developed the Australian Wind Energy Forecasting System

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Solar Flagships Program Department of Resources, Energy and Tourism

• Solar photovoltaic – AGL Energy - a multi-site project using thin film cadmium telluride solar photovoltaic

technology generating up to150MW – TRUenergy - single site using thin film cadmium telluride solar photovoltaic

technology to generate up to 180MW– Infigen/Suntech - crystalline silicon solar photovoltaic technology would be

deployed at up to three sites to generate up to 195MW– BPSolar - a single axis tracking photovoltaic system to generate 150MW from

plants constructed at several locations • Solar thermal

– ACCIONA Energy Oceania - generate 200MW using solar thermal parabolic trough technology at a single site

– Parsons Brinckerhoff - construct a 150MW solar thermal parabolic trough power station

– Wind Prospect CWP - linear fresnel technology to construct a 250MW power plant– Transfield – convert a coal-fired power station into a 150MW solar thermal linear

fresnel power plant

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Carbon Capture and Storage Flagships Program

Department of Resources, Energy and Tourism• Wandoan power project located north-west of Brisbane, Queensland, an Integrated Gasification Combined Cycle (IGCC) coal fired power project.

• ZeroGen project located west of Gladstone in Queensland; also an IGCC project.

• Collie South West Hub located south of Perth in Western Australia in close proximity to the industrial centres of Kwinana and Collie and based around an integrated multi-user capture, transport and storage infrastructure project.

• CarbonNet proposal in Victoria’s La Trobe valley, another integrated multi-user capture, transport and storage infrastructure project, with sources of CO2 from electricity generating plans in that area.

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Department of Innovation, Industry,

Science and Research

Industry House

10 Binara Street

Canberra City, ACT 2607, Australia

Telephone +61 2 6213 6000