ARENA needs AU$460m federal funding lifeline, says Australia Institute

Think tank the Australia Institute has urged Prime Minister Scott Morrison’s federal government to carve out fresh funding for the Australia Renewable Energy Agency (ARENA) in its 2022-23 and 2023-24 budgets.

The agency has no funding beyond 2021-22 and will not be able to sponsor new clean energy projects from August 2020 onwards, the Canberra-based group warned in a pre-budget submission paper on Tuesday.

Funding of AU$230 million (US$155 million) for the two financial years would sustain ARENA and its projects while a longer-term funding plan is devised, according to the Australia Institute.

ARENA has invested AU$1.44 billion (US$970 million) in 478 projects since it was established in 2011 by a Labor government. Those projects have yielded a total value of AU$5.49 billion (US$3.70 billion).

Solar PV has benefited from the largest chunk of grants, at AU$654 million (US$441 million), or 46% of total investment.

The think tank's report notes that investments in solar PV "have driven deployment innovation in large-scale solar farms, reduced costs in Australia and also gone to ‘pure’ R&D designed to improve the efficiency of PV cells, which has global benefits."

The act that brought ARENA into existence set out an allocation of AU$2.5 billion (US$1.7 billion) in funding until 2020, but funding was slashed by Liberal-led governments in 2014 and 2016.

“While a 10-year funding commitment of at least $2.5 billion is ultimately needed to guarantee the long-term future of ARENA, a two-year fully funded extension for the agency will keep clean energy innovation in Australia thriving in the short-term,” Dan Cass, energy policy and regulatory lead at The Australia Institute said in a statement.

“Australia needs ARENA, if we are to do our fair share of global emissions reductions,” he added.

Tags: arena, australia, australia renewable energy agency, utility-scale solar, scott morrison, solar pv