Australian Government Policy Drivers for Renewable Energy Development

11 June 2010 Presented by John Rooney Manager – Industry, Energy and Environmental Policy Section Industry and Small Business Policy Division Department of Innovation, Industry, Science and Research 1

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 2

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 3

Renewable energy in Australia

Source: AERA, 2010

4

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 5

• • • • • •

Energy Transformed Flagship

CSIRO

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 6

Renewable Energy Equity Fund

Department 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 7

R&D Tax Concession/Credit

Department 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 8

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 9

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 10

Transport Fuel Grants

Department 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 11

Clean Energy Innovation Centre

Department 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 12

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 13

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 14

Renewable Energy Future Fund

Department 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 15

CCS Flagships (and associated support) Australian Centre for Renewable Energy (and associated support) Solar Flagships (and associated support) Overall funding Components $2.4 billion $0.56 billion $1.6 billion Flagships: $2000 million NLECI: $400 million ACRE funding: $567 million Flagships: $1,500 million Solar Institute: $100 million

16

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 17

• • • •

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 18

• • • • •

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 19

• • • • • • •

ACRE’s Second Generation Biofuels Research and Development

Department of Resources, Energy and Tourism

The University of Melbourne

– biofuel from Micro algae involving the efficient separation, processing and utilisation of algal biomass ($1.24 million)

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

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

Licella Pty Ltd

($2.288 million) – commercial demonstration of Lignocellulosics to stable bio-crude 20

• •

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 21

22

• •

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

250MW power plant - linear fresnel technology to construct a

Transfield

–

convert a coal-fired power station into a 150MW solar thermal linear fresnel power plant 23

24

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

infrastructure project. 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

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. 25

Department of Innovation, Industry, Science and Research

Industry House 10 Binara Street Canberra City, ACT 2607, Australia Telephone +61 2 6213 6000 26