Prime Minister Malcolm Turnbull has announced that the Government will provide funding to support the development and demonstration of new energy storage technologies, while calling for new coal and gas reserves to be tapped to provide increased baseload capacity.
In an address to the National Press Club, the Prime Minister outlined his priorities for the parliamentary year ahead, identifying energy as a core focus of the debate to be pursued this year.
During the speech, the Prime Minister announced that a partnership will be established between the Australian Renewable Energy Agency (ARENA) and the Clean Energy Finance Corporation (CEFC) to support the development of flexible capacity and large-scale energy storage.
The two agencies will work together on a new funding round to provide targeted support for the development of large-scale storage projects, including the demonstration of pumped hydro energy storage.
ARENA is expected to provide a pool of grant funding at least $20 million to support large-scale energy storage demonstration projects.
Projects that provide flexible capacity, including battery storage, pumped hydro energy storage, solar thermal storage, biomass and demand management technologies will be eligible for funding.
CEFC CEO Oliver Yates said the CEFC would provide successful ARENA funding recipients with the opportunity to secure long-term debt finance to support their projects. The CEFC was also open to considering finance solutions for other projects not seeking ARENA funding. CEFC finance would be provided along similar terms to its $250 million commitment to accelerate large-scale solar.
The aims of this partnership are to develop and deploy technologies that work to improve the reliability and resilience of the energy system. Ultimately, the Prime Minister is hoping the investments in technologies that support electricity reliability will also work to keep energy prices down.
“As ARENA and the CEFC work to accelerate Australia’s shift to an affordable and reliable renewable energy future, we know that the energy sector and the whole economy face a range of challenges in ensuring it is an orderly transition.” ARENA CEO Mr Ivor Frischknecht said.
“The intention, as is always the case with ARENA and the CEFC, is to accelerate a technology’s path to commerciality as quickly as possible and then step away,” said Mr Frischknecht
Prime Minister Turnbull also called on State Governments to support the opening up of coal and gas supplies to provide additional baseload generation capacity. The Prime Minister laid blame with Labor led State Governments, specifically those of South Australia and Victoria for putting in place renewable energy targets that have incentivised the construction of additional “intermittent” renewable energy technologies.
“States are setting huge renewable targets, far beyond that of the national RET, with no consideration given to the baseload power and storage needed for stability” the Prime Minister said.
“The next incarnation of our national energy policy should be technology agnostic – it’s security and cost that matter most, not how you deliver it. Policy should be “all of the above technologies” working together to deliver the trifecta of secure and affordable power while meeting our emission reduction commitments.”
The Climate Institute criticised the lack of detail provided in the Prime Minister’s energy plan, saying that while support for energy storage is welcomed, the need for long-term policy stability has yet to be addressed.
“Support for storage technologies that can support renewables is a positive step towards achieving net zero emissions in our electricity system,” said The Climate Institute’s CEO, John Connor.
“However, the government is continuing to ignore the reality that the greatest threat to energy security, prices and emissions reductions is the lack of a long term national strategy to modernise and decarbonise our energy system.”
Energy prices have been a focus of political debates between major parties, with the Abbott lead Coalition winning government in 2013 on the back of a sustained attack on the previous Labor Government’s carbon price. Members of the Coalition backbench have openly fought to maintain this point of differentiation, believing they can continue to win the political debate over Labor with regards to electricity prices.
Late last year, the Turnbull Government reversed a long held policy for the abolition of both ARENA and the CEFC, striking a deal with the Labor Party to retain ARENA with $800 million of its remaining funding.