The Australian Renewable Energy Agency (ARENA) is the main funder of energy innovation in Australia. It was established by the Labor Government in 2011 with multiparty support, including from the then Liberal-National Opposition.
ARENA’s funding is set in legislation. Currently, its grant making funding ends on 30 June 2022. However, the nature of energy project planning means that ARENA will effectively cease making new investments in mid-2020.
Australia will need ARENA over the 2020s to deliver reliable, clean electricity and help decarbonise the wider economy over the Paris Agreement period (2021-2030). This will require a similar if not greater commitment to ARENA’s original funding, of $2.5 billion over 10 years, and an expansion of its remit to include, for example, renewable energy transport and green hydrogen for manufacturing.
Technology and innovation are central to the Australian Government’s policy for achieving emissions reduction. At the 2019 UN Climate Change Conference, Energy and Emissions Reduction Minister Angus Taylor highlighted a Technology Investment Roadmap and signed the country up to the technology-focused Leadership Group for Industry Transition. ARENA is key to the success of all these initiatives.
Analysis of federal ministerial media releases about ARENA reveals that the LiberalNational Government associated itself with ARENA’s successes 149 times between 18 Sept 2013 and 30 July 2019. Since July 2014, 100% of Ministerial media releases issued have supported ARENA.
Polling commissioned by the Australia Institute in October 2019 found a majority of the public supports extending ARENA’s funding. While long term support for ARENA is negotiated and finalised, the Government should amend the Australian Renewable Energy Agency Act 2011 to ensure ARENA continues to operate at capacity through 2020, providing a $460 million extension of funding to FY24.
This short-term funding, and the long-term funding solution can be legislated onbudget or it could be allocated, at least in part, from the Clean Energy Finance Corporation through a dividend. Either way this would give ARENA the ability to continue its work over the next few critical years until a long term strategy and funding agreement is legislated.