Member Participation

Australia

Narrative

The Australian Government is committed to addressing climate change while at that same time ensuring we maintain energy security and affordability.

Australia recognises that supporting the development, demonstration and deployment of clean energy technologies is necessary to transition the world’s energy sector to low emissions over the course of the century.

Along with other Mission Innovation members, Australia has pledged to double government clean energy research and development expenditure by 2020 while encouraging greater levels of private sector investment in transformative clean energy technologies.

Australian Policy Context

The Australian Government has ratified the Paris Agreement and set a target of reducing emissions by 26 to 28 per cent below 2005 levels by 2030. This target amounts to a halving of per capita emissions and a two thirds reduction in emissions intensity of economic activity. It is among the strongest targets of major economies on that basis.

In announcing Australia’s 2030 target, the Government committed to review its climate change policies during 2017. The review aims to ensure policies remain effective in achieving Australia’s 2030 target and Paris Agreement commitments. The review has commenced and will conclude by the end of 2017.

The 2017 climate change review is monitoring and being informed by other work which have been ongoing over the course of the last year:

  • The CSIRO’s Low Emissions Technology Roadmap for Australia will make recommendations on Australia’s future clean energy research and development opportunities, including where to focus domestic research and to collaborate internationally to deliver clean energy solutions for Australia.
  • In addition, Australia’s Chief Scientist Dr Alan Finkel is conducting an independent review into the security and reliability of the National Electricity Market, and will provide advice to the Council of Australian Governments on a coordinated, national reform blueprint.

Clean Energy Innovation Support

Australia has a set of targeted government programmes working together to support research and development and to help emerging technologies to make the transition from demonstration to commercial implementation.

Research and development grants are provided by the Australian Renewable Energy Agency (ARENA), the Australian Research Council, CSIRO and universities.

Seed funding for emerging technology is provided by the Clean Energy Innovation Fund and ARENA.
Projects near commercial deployment can access debt and equity from the Clean Energy Finance Corporation (CEFC).

Emissions reduction policies, such as the Renewable Energy Target and Emission Reduction Fund, help to pull innovations through to widespread market diffusion.

Innovation chain disagram
Figure 1: Australian Government measures across the innovation chain

Through policy frameworks and institutions, Australia is making important strides towards achieving our Mission Innovation pledge.

In September 2016, the Government reinstated $800 million in funding to the ARENA over five years, commencing from the 2017-18 financial year. This adds to the funding already available for ARENA’s existing projects and pipeline of projects. Altogether, ARENA will have about $1 billion to spend towards its objectives over the next five years.

On 1 May, the ARENA Board released a detailed Investment Plan, setting out four investment priorities that will guide how these new funds are directed over the coming years. These are:

  1. Delivering secure and reliable electricity
  2. Accelerating solar PV innovation
  3. Improving energy productivity
  4. Exporting renewable energy.

On 22 May 2017, ARENA opened a new grant funding round of approximately $20 million targeting research and development projects that accelerate solar PV innovation.

The Clean Energy Innovation Fund provides financial support for innovative and emerging clean energy technologies to become commercially viable. It is funded from the CEFC’s capital allocation and has now committed $25 million of its $200 million allocation in its first year of operation.

This including a $10 million cornerstone investment in a Clean Energy Seed Fund administered by Artesian Venture Partners. The Seed Fund targets scalable, high growth potential start-ups fuelling innovation and creating opportunities in the development of clean technology.

The CEFC continues making clean energy investments in later stage commercialisation and deployment projects on a commercial basis.

Since its establishment on 1 July 2013, the CEFC has made cumulative commitments of more than $3 billion to projects worth over $8.3 billion. These investments are collectively earning a return above the cost of borrowing.

Consistent with advice from the International Energy Agency, the Government is considering options to give CEFC and ARENA flexibility to make technology-neutral investments in the future.

International Collaboration Priorities

Australian scientists and researchers are making world-leading contributions to the development of clean energy technologies, including in solar PV, solar thermal, wave energy, biofuels and hydrogen.

Case Study: CSIRO Hydrogen Membrane

The Commonwealth Science and Industry Research Organisation has developed a metal membrane which allows high-purity hydrogen to be separated from ammonia. The technology, now being trialled on an industrial scale in Australia, will allow hydrogen to be transported and used as an energy source.

Hydrogen is difficult to transport over long distances because it has such a low density. Ammonia is a good way of transporting hydrogen because it is denser than liquid hydrogen. The technology the CSIRO has developed can then be applied at the point of delivery, converting ammonia back into hydrogen for use in transport fleets or electricity generation.

Australia is excited by the opportunities for future research and development collaboration under the Mission Innovation’s seven Innovation Challenges. Australia has active research underway in many clean energy technologies relevant to the Innovation Challenges, and is particularly interested in collaboration opportunities under the Converting Sunlight, Smart Grids, Carbon Capture Use and Storage, and Heating and Cooling challenges.

We are committed to driving innovation and deployment of clean energy technologies on the world stage. Australian innovation has long been successfully commercialised in the global marketplace – for example, it is projected that University of New South Wales photovoltaics innovation will be embedded in almost half of all new solar panels sold globally by 2020.

Our world class universities and research institutions will continue to collaborate with international colleagues and organisations to unlock new ideas and transitional pathways in the energy sector.

We will continue to build international partnerships to improve commercial opportunities for Australian renewable energy technology, such as the Australia-US Solar Thermal Research Initiative and the Australia-US Institute for Advanced Photovoltaics.

Other Policy Settings that Support Low-Emissions Innovation

Table 1: Policies supporting low-emissions technology and innovation

National Innovation and Science Agenda The Agenda is a blueprint to transform Australia into a leading innovation nation. The Agenda includes new tax incentives for research and development, co-investment from the CSIRO Innovation Fund to commercialise new technologies and establishing Industry Growth Centres in key sectors of competitive advantage like oil, gas and energy resources.

http://www.innovation.gov.au/page/agenda

Commonwealth Scientific and Industrial Research Organisation CSIRO pioneers low-emissions technologies and provides knowledge which will help guide Australia towards a smart, secure energy future. CSIRO’s current key research areas include low-emissions coal mining and energy production, energy storage, solar energy, electricity grid modelling and carbon capture and storage.

https://www.csiro.au/en/Research/EF

Australian Research
Council
The ARC provides Government support for research in Australia. It delivers policy and programs that advance Australian research and innovation globally and benefit the community.

The National Competitive Grants Program, administered by the ARC, provides, on average, around $800 million a year in research support across the economy including to projects that contribute to reducing emissions.

http://www.arc.gov.au/welcome-australian-research-council-website

National Climate Science Advisory Committee The Committee provides the strategic direction for Australian climate science research to address business needs and policy development.
Clean Energy Finance Corporation The CEFC uses financial products and structures to address the barriers inhibiting investment in clean energy technologies. The CEFC invests for a positive financial return. As at May 2017, the CEFC had made cumulative commitments of almost $3 billion. These projects and programs are catalysing a further $8.3 billion in other investment. CEFC commitments include more than 60 direct investments.

http://www.cleanenergyfinancecorp.com.au/

Australian Renewable
Energy Agency
ARENA’s objectives are to improve the competitiveness of renewable energy technologies and increase supply of renewable energy in Australia. As at October 2016, ARENA had provided $1.1 billion in grant funding for more than 270 projects, drawing in a further $1.6 billion in other investment. Investments have spanned the commercialisation pathway. ARENA has $800 million of new funding available over the next five years.

https://arena.gov.au/about-arena/

Support for low-emissions technology and carbon capture and storage As at 31 December 2016, the Government is delivering $590 million of funding to low-emissions support programs and continues to encourage industry to reduce emissions through a range of low-emission technology measures. These are administered by the Department of Industry, Innovation and Science. The Government has contributed funding and support for an industry-led Carbon Capture and Storage Roadmap for Australia, released in February 2017.

https://industry.gov.au/resource/LowEmissionsFossilFuelTech
http://www.co2crc.com.au/comprehensive-support-carbon-capture-storage-australia/

Global Innovation Linkages program The Global Innovation Linkages program provides funding to help Australian businesses and researchers to collaborate with global partners on strategically focused, leading-edge research and development projects. It supports projects focused on developing high quality products, services or processes that will respond to industry challenges.

The program provides funding for business and researchers to collaborate with global partners on research and development projects.  Projects must focus on priority areas and priority economies. The program is delivered by AusIndustry.

https://www.business.gov.au/assistance/global-innovation-linkages-programme

Global Connections fund The Global Connections Fund provides initial funding support to promote Australian Researchers and Small to Medium Enterprises (SMEs) collaboration

The Program consists of two forms of funding: Priming Grants and Bridging Grants which are designed to:

  • increase linkages and collaborations with key global economies;
  • promote researcher-industry engagement and knowledge transfer; and
  • encourage translational activities, end use development and commercialisation outcomes.

The fund is administered by the Australian Academy of Technology and Engineering.

https://globalconnectionsfund.org.au/

Australia’s Emissions Reduction Policies

Table 2: Australian Government emissions reduction policies

Emissions Reduction Fund The Emissions Reduction Fund provides incentives for emissions reduction activities across the Australian economy. Under the Fund, a range of activities are eligible to earn Australian carbon credit units. Projects must comply with an approved method that measures verifiable reductions in emissions and sets out the rules for activities which can earn carbon credits.

The Government purchases credits through a reverse auction system.

The first four Emissions Reduction Fund auctions have contracted 178 million tonnes of emissions reductions at an average price of $11.83 per tonne.

https://www.environment.gov.au/climate-change/emissions-reduction-fund

Safeguard Mechanism The Safeguard Mechanism is part of the Emissions Reduction Fund. It is designed to ensure emissions reductions purchased by the Government are not offset by significant increases in emissions above business-as-usual levels elsewhere in the economy.

The Safeguard Mechanism puts limits (baselines) on the emissions of facilities that emit more than 100,000 tonnes of emissions a year. These baselines cover around half of Australia’s emissions, including facilities in the manufacturing, electricity, mining, oil and gas, transport and waste sectors. A single sectoral baseline applies to grid-connected electricity generators.

https://www.environment.gov.au/climate-change/emissions-reduction-fund/about/safeguard-mechanism

Renewable Energy Target The Renewable Energy Target scheme aims to encourage additional generation of electricity from renewable sources and reduce emissions in the electricity sector. The scheme provides a financial incentive for investment in new renewable energy projects. It aims to grow the share of renewable energy to around 23 per cent of electricity supply by 2020.

The RET has two components. The Large-scale Renewable Energy Target of 33,000 GWh by 2020 encourages investment in large-scale projects. The Small-scale Renewable Energy Scheme helps home-owners and small businesses to install eligible small-scale renewable energy systems and solar hot water systems.

https://www.environment.gov.au/climate-change/renewable-energy-target-scheme

National Energy Productivity Plan The NEPP provides a framework and an initial economy-wide work plan designed to accelerate delivery of a 40 per cent improvement in Australia’s energy productivity by 2030. The NEPP aims to boost competitiveness and growth, help families and businesses manage their energy costs and reduce emissions. The NEPP is driving change and accelerating energy productivity improvement through measures which support:

  • smarter energy choices (by providing more efficient incentives, empowering consumers and promoting business action)
  • better energy services (by driving greater innovation, more competitive and modern markets and updating consumer protections and standards).

https://www.environment.gov.au/energy/national-energy-productivity-plan

Clean Energy Finance Corporation The CEFC uses financial products and structures to address the barriers inhibiting investment in clean energy technologies. The CEFC invests for a positive financial return. As at May 2017, the CEFC had made cumulative commitments of almost $3 billion. These projects and programs are catalysing a further $8.3 billion in other investment. CEFC commitments include more than 60 direct investments.

http://www.cleanenergyfinancecorp.com.au/

Australian Renewable
Energy Agency
ARENA’s objectives are to improve the competitiveness of renewable energy technologies and increase supply of renewable energy in Australia. As at October 2016, ARENA had provided $1.1 billion in grant funding for more than 270 projects, drawing in a further $1.6 billion in other investment. Investments have spanned the commercialisation pathway. ARENA has $800 million of new funding available over the next five years.

https://arena.gov.au/about-arena/

National Carbon Offset Standard The National Carbon Offset Standards provide benchmarks for organisations seeking to make their operations, products, services, buildings, precincts or events carbon neutral. The Carbon Neutral Program provides a framework for certifying carbon neutrality against the National Carbon Offset Standards.

http://www.environment.gov.au/climate-change/government/carbon-neutral/ncos

Solar communities The Solar Communities program will support local responses to climate change and deliver lower electricity costs for community organisations. It will provide $5 million in funding for community groups in selected regions to install rooftop solar panels, solar hot water and solar-connected battery systems for community-owned buildings.

https://www.environment.gov.au/climate-change/renewable-energy/solar-communities

Australia’s international climate policies Australia plays a leading role in global efforts to reduce emissions, including through the Asia Pacific Rainforest Partnership and the International Partnership for Blue Carbon.

Australia supports the building of climate resilience in our region through the aid program. Australia shares expertise to support developing countries through capacity building programs on measurement, reporting and verification, particularly national inventories and in the forests and land sector. This work improves transparency and confidence in global mitigation efforts, including through international cooperation.

https://www.environment.gov.au/climate-change/rainforest-recovery

http://bluecarbonpartnership.org/

Baseline and Doubling Plans

  • Country-Determined Baseline Year(s): 2015
  • Baseline Funding Amount: AUD $108 million (USD $80 million)
  • Doubling Target-Year: 2020
  • Doubling Target Amount: AUD $208 million (USD $156 million)

Methodology for Determining Baseline

Australia nominated a Mission Innovation baseline of $104 million, based on the 2015 figures reported to the International Energy Agency (IEA) for combined research and development into the following focus areas:

  • renewable energy
  • energy storage
  • fuel cells
  • smart grids
  • energy efficiency
  • nuclear
  • carbon capture and storage.

This baseline has since been revised to AUD $108 million, reflecting differences between projected spend and actual spend in financial year 2015-16, as well as improved data in relation to the above activities.

The baseline excludes research and development spending on fossil fuels, electricity transmission and distribution networks, recoupable investments made by the Clean Energy Finance Corporation (CEFC), and expenditure on later stage deployment.

Country-Definition of Clean Energy R&D Investment

Research and development in low carbon technologies, including end use energy efficiency, renewable energy, nuclear energy, electric grid technologies, carbon capture and storage, and advanced transportation systems and fuels. Investments are implemented through a number of mechanisms including cost-shared projects with the private sector, research and development activities at the National Laboratories, grants to universities, and support for collaborative research centers targeted to key energy technology frontiers.

Overview of Clean Energy R&D Focus Areas Emphasized in Mission Innovation Portfolio

Industry & buildings

 

Vehicles & other transportation

 

Bio-based fuels & energy

 

Solar, wind & other renewables

 

Nuclear energy

 

Hydrogen & fuel cells

 

Cleaner fossil energy
CO2 capture, utilization & storage

 

Electricity grid

 

Energy storage

 

Basic energy research

 

Indicators are for key areas of Mission Innovation R&D investment but do not imply a comprehensive representation of a country’s full R&D portfolio.

The Government’s Innovation and Science Agenda outlines how we will transform our approach to innovation and science right across the economy with major new initiatives.

“The Australian Government recognises the importance of science, innovation and technology to our future prosperity and economic security as a nation in a rapidly expanding and diversifying global economy.” Prime Minister Malcolm Turnbull, 27 October 2015.

The Australian Government’s support for clean energy extends well beyond the research and development stage, and includes a comprehensive suite of policies to drive innovation and large scale uptake across the energy supply chain.

More detail is available from the Prime Minister’s website here.

Prime Minister Turnbull on Mission Innovation:

“We do not doubt the implications of the science, or the scale of the challenge. But above all we do not doubt the capacity of humanity to meet it – with imagination, innovation and the prudence that befits those, like us, who make decisions that will affect not just our own children and grandchildren but generations yet unborn.

Here in Paris Australia supports a new – and truly global – climate agreement. It is an agreement that must drive humanity’s capacity for inventiveness and a new wave of technological advances. We firmly believe that it is innovation and technology which will enable us both to drive stronger economic growth and a cleaner environment.

We are a highly social and innovative species and so the more we share innovative technologies, the better they will become. Today Australia joins with many other countries in supporting Mission Innovation which aims to double investment in clean energy innovation over the next five years.”

Full statement

Related sites:

Prime Minister’s website

Department of the Environment and Energy

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