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We are here this morning because we all recognise the significance of the Australian Government's Renewable Energy Demonstration Program in the context of Australia's move towards a cleaner energy future.
The $435 million Renewable Energy Demonstration Program is a competitive, merit-based fund.
The program will help take pilot-scale technologies through to the next level - demonstrating them at a commercial scale.
Australia is very fortunate to have a number of innovative companies working on a wide range of renewable technologies - solar, geothermal, ocean thermal, wind and wave - that could provide the key to our clean energy future.
I encourage them all to consider participating in this program.
The Renewable Energy Demonstration Program will stimulate more than $1 billion worth of investment, with the Australian Government providing $1 for every $2 invested by successful applicants.
I am hopeful such a large level of investment will accelerate the deployment of new renewable energy technologies here in Australia and position Australian companies at the forefront of the global technology race for cleaner energy supplies.
With commercial scale in mind, grants are likely to be in the range of $50 -100 million.
Funding is available for the 2008-09 and 2009-10 financial years subject to the availability of suitable demonstration projects.
Applications are also invited for projects which extend beyond 30 June 2010.
Registrations of Interest close on Wednesday, 4 March, and full applications close on Wednesday 15 April 2009.
I urge every company with an eligible project to make the most of this opportunity.
The Australian Government is a keen supporter of renewable energy. From the Prime Minister down - we are committed to a cleaner energy future. Renewables are part of that future, as is low emissions coal.
But as a Government, we cannot predict which renewable energy technology will best deliver the economic and environmental outcomes we desire throughout the coming decades.
And nor should we at this stage try.
It is too early to be picking winners.
Australia is very fortunate to have abundant and diverse renewable energy resources.
This affords us the opportunity to be flexible in developing the policy mechanisms to drive growth in renewable energy commercialisation and deployment.
The Australian Government has the world's best policy settings to achieve this growth and foster innovation, creativity and healthy competition.
In broad terms, there are two paths available to governments seeking to promote renewable energy.
The first is to pay feed-in tariffs to generators which use a particular energy source.
The other is for government to mandate a renewable energy target and support broad-based research and development into competing forms of renewable energy.
It is my strong view that given Australia's abundance of alternate energy options - it is this second methodology which will deliver the most economically and environmentally responsible outcomes.
Feed-in tariffs can have a number of unintended consequences.
Artificially pricing one energy source 300 per cent or 400 per cent higher than others (including other renewables) could divert investment from technologies that might in fact produce better environmental outcomes at lower cost.
Legislating a feed-in tariff effectively picks that jurisdiction's renewable energy of choice - and it can be very expensive.
Germany's solar subsidy saw around half of 1 per cent of Germany's gross electricity consumption come from solar PV in 2007. Yet German consumers that year paid more than €1 billion in additional power bills to cover the cost of this policy.
That is more than 2.5 billion Australian dollars in one year. That is the price of picking winners and why COAG, at its November meeting, agreed to a set of national principles for feed-in tariffs, based on the fair treatment of small renewables.
It is the Australian Government's objective to deliver renewable energy to Australian consumers at the lowest possible cost by allowing a wide range of renewable technologies to compete in the race to commercialisation and market.
The competitive grants we launch today provide the opportunity for each of Australia's many emerging renewable energy technologies to participate in that race.
We want them to have equal opportunity to show their potential.
In time, it will be the role of the market to decide on the most efficient and effective allocation of that technology.
I trust you can see why the $435 million commitment we are launching today forms such an important part of our strategy to see the most economically and environmentally effective technologies come to the fore in Australia.
The Australian Government's commitment to driving renewable energy growth also includes our renewable energy target that means by 2020, a fifth of Australia's energy will come from renewable sources.
In addition, we are committed to reducing Australia's greenhouse gas emissions by 60 per cent on 2000 levels by 2050.
Next year, we will put a price on CO2 emissions via our Carbon Pollution Reduction Scheme.
And of course - there is our comprehensive support to develop Australian wind, wave, ocean, solar, and geothermal technologies.
The Government has now allocated:
- $435 million to the Renewable Energy Demonstration Program to take proven pilot projects to commercialisation.
- $100 million to fund the work of The Australian Solar Institute
- $50 million to the Clean Energy Program, for new renewable energy pilot projects.
- $50 million to the Geothermal Drilling Program to develop Australia's huge geothermal potential.
We know renewable energy will play an important role in Australia's future energy mix.
Today I am very pleased to launch the program that will help bring renewable technologies to market: the Renewable Energy Demonstration Program.