Australia's leadership in clean and renewable energy technologies received a boost with the establishment of three new measures in the 2008-09 Budget:
Funding will commence in the 2008-09 year for the Energy Innovation Fund’s solar research component and the National Clean Coal Fund while funding for the Renewable Energy Fund will commence in 2009-10.
The phasing of this funding will allow time for consultation and decisions on funding guidelines. It will also allow potential applicants to plan projects in accordance with these guidelines and in the context of other climate change policies; including the design of the emissions trading scheme and the renewable energy target.
The Minister for Resources and Energy, Martin Ferguson, said: “The EIF will boost Australia’s existing momentum in solar technology research, particularly solar thermal which has great potential for baseload power and in which the CSIRO in Newcastle is a world leader. Solar photovoltaics will also benefit from the EIF. $100 million will go to solar technology research through the EIF, to be administered by a new body, the Australian Solar Institute.
"The EIF will invest a further $50 million in other innovative technologies including energy storage and hydrogen”, Minister Ferguson said.
"The REF will accelerate the development and commercialisation of new renewable energy technologies in Australia by demonstrating these technologies on a commercial scale. Initial funding from the REF will go to geothermal energy which has already demonstrated great potential in Australia. $50 million will be directed to a Geothermal Drilling Program for ‘proof-of-concept’ projects in known resource areas.
"Second generation biofuel technology will also be a high priority for funding with $15 million to be allocated from the REF," Minister Ferguson said.
The Australian Government is also establishing a $500 million National Clean Coal Fund to support the National Clean Coal Initiative aimed at deployment of low emission technologies out to 2030. Coal producers are contributing more than $1 billion in funding through Coal21. This concentrated funding will provide an enormous opportunity for breakthroughs in clean coal technologies, including carbon capture and storage. Australia already has a number of demonstration projects under way or well advanced, including the deep geological storage project in the Otway Basin in Victoria and an oxy-firing project at Callide in Queensland.
The National Clean Coal Fund also includes $75 million – including $25 million for CSIRO – to be invested in clean coal research.
"Coal accounts for more than 80 per cent of Australia's electricity supply. It is also Australia’s biggest export, reflecting its importance in the global energy mix. Export revenue from coal is predicted to increase by around $20 billion to $43 billion in 2008/09," Minister Ferguson said.
"Coal is vital to the Australian economy and to the developing world as it lifts its people out of poverty. Therefore no serious response to climate change can ignore the need to clean up coal. It is important that we reduce its carbon footprint so that all Australians can continue to benefit from this significant natural endowment and emerging nations can grow their economies in a sustainable way."
"We have great potential to build on our already substantial work in renewable and clean energy technology research and development. These programs will provide industry with an opportunity to develop, demonstrate and commercialise new technologies for Australia’s future energy security."
Detailed fact sheets on each program are separately available (see content below).
Media contact: Michael Bradley (Canberra) 0420 371 744
Supporting Information
ENERGY INNOVATION FUND
Why is this important?
- The Australian Government's commitment to reduce Australia's greenhouse gas emissions by 60 per cent on 2000 levels by 2050 will require substantial greenhouse gas reductions through greater energy efficiency and cleaner energy technologies in association with a national emissions trading scheme.
- The Energy Innovation Fund has a number of objectives:
- to restore and maintain Australia’s world leadership in solar energy research and development;
- to develop and advance Australia’s research and development capabilities and intellectual property in clean energy technologies;
- to increase the level of collaboration within Australia and internationally on clean energy research and development; and
- to create clean energy technology development, growth and export opportunities for Australian businesses
- In particular, Australia has yet to fully realise the potential of solar energy technology development and commercialisation, an area in which we already have world-class research capabilities.
Who will benefit?
- Australian consumers and industry will benefit from the accelerated development and deployment of cost-effective clean energy technologies that help meet our greenhouse targets.
- Australia’s universities and research community – both in the public and private sectors –will directly benefit from an injection of funding to advance new ideas in the renewable and clean energy technology area.
- Australian businesses will also benefit through new development, manufacturing, supply and export opportunities.
What funding is the Government committing to the initiative?
- The Australian Government is committing $150 million over five years to the Energy Innovation Fund:
- Funding of $100 million will support the creation of an Australian Solar Institute and support solar thermal and solar photovoltaic research and development; and
- $50 million will be provided through the Clean Energy Program, a new program targeted at general clean energy research and development, including energy efficiency, energy storage technologies and hydrogen transport fuels.
Timeframe for delivery, ie when will the initiative commence and conclude?
- The Energy Innovation Fund will commence on 1 July 2008 for four years until 30 June 2012.
- Delivery mechanisms will be different for each element of the fund, with the Clean Energy Program to be a competitive merit-based application process.
- Consultation on the rollout of the Energy Innovation Fund has commenced and will continue in the second half of 2008.
RENEWABLE ENERGY FUND
Why is this important?
- Substantial greenhouse gas reductions across the Australian economy will be required if the target of reducing emissions by 60 per cent on 2000 levels by 2050 is to be achieved.
- The Australian Government has committed to ensuring renewable energy has a 20 per cent share in Australia's electricity supply by 2020 by increasing the current mandatory renewable energy target from 9,500 gigawatt-hours to 45,000 gigawatt-hours in 2020.
- The Renewable Energy Fund, including the Renewable Energy Demonstration Program, the Second Generation (Gen2) Biofuels Research and Development Program and the Geothermal Drilling Program, will support the adoption of renewable energy technologies in Australia.
- The Government recognises that achieving this goal will require demonstration of new, renewable technologies on a commercial scale to help prove the technologies and attract further private sector investment.
- By reducing the risk of commercial deployment and thereby accelerating widespread use in Australia, the new renewable energy target is more easily achievable.
- It is widely recognised that second generation biofuel technologies provide unique opportunities to supplement existing fuel supplies in a sustainable manner by deriving biofuel from low cost, non-food materials.
- This program will provide pioneers in this fledgling industry with an opportunity to develop and demonstrate new technologies and contribute to future energy security and environmental benefits for Australia.
- The Geothermal Drilling Program will provide a much needed boost to the geothermal industry to help overcome the barriers to drilling for heat resources in the quest for proving that geothermal resources can supply baseload power for the Australian energy market.
Who will benefit?
- The benefits of the Renewable Energy Fund will be wide ranging, reflecting the potential that renewable energy will have in Australia's future.
- Significantly, the Renewable Energy Fund will help to reduce the cost of demonstrating and deploying key energy technologies that may play a critical role in energy supply and security over the next few decades.
- Direct beneficiaries of the Renewable Energy fund will be the renewable energy industry, including the geothermal industry and biofuels industries, through new demonstration and development opportunities.
- Research institutions, businesses, local government, councils and rural communities will have an opportunity to develop or demonstrate second generation biofuel feedstock and/or processes.
- Other Australian businesses will benefit as part of the supply chain through new manufacturing, supply and export opportunities.
- The Australian community will benefit through the development of local technologies to reduce greenhouse gas emissions across a range of sectors, including electricity generation and transport.
What funding is the Government committing to the initiative?
- The Australian Government is providing $500 million over six years.
- This includes:
- $50 million for the Geothermal Drilling Program; and
- $15 million over three years for the Second Generation (Gen2) Biofuels Research and Development Program.
Timeframe for delivery, ie when will the initiative commence and conclude?
- The Renewable Energy Fund will commence on 1 July 2009 for six years until 30 June 2015.
- Funding will be subject to competitive, merit-based processes for the various elements of the Fund.
- Consultation on program guidelines will occur in the second half of 2008, including for the Second generation (Gen2) Biofuels Research and Development Program. Final consultation on the Geothermal Drilling Program will occur over coming months.
- The first round of applications will be called in the first half of 2009.
NATIONAL CLEAN COAL INITIATIVE
Why is this important?
- The Australian Government's commitment to reduce Australia's greenhouse gas emissions by 60 per cent on 2000 levels by 2050 will require substantial greenhouse gas reductions from the operation of Australia's coal-fired power stations.
- Coal provides around 80% of Australia’s total electricity, and accounts for around 32% of Australia's total greenhouse gas emissions.
- Coal is Australia’s biggest export reflecting its importance in the global energy mix. Export revenue from coal in 2008-09 is expected to be around $43 billion.
- The National Clean Coal Initiative supports the development and deployment of clean coal technologies that Australia will need to achieve substantial reductions in greenhouse gas emissions from future coal use while guaranteeing the contribution that coal makes to the economy and energy security.
Who will benefit?
- There will be widespread consumer and industry benefits from the National Clean Coal Initiative reflecting the contribution it will make to achieving cost-effective large-scale reductions in greenhouse gas emissions from coal-fired power generation.
- Direct beneficiaries of funding provided under the National Clean Coal Fund will include the research community and technology developers, operators of demonstration projects and developers of CO2 storage sites and associated infrastructure.
- Industry stakeholders including coal producers and power producers, will contribute an additional $1 billion in funding for the Initiative (including through Coal21) and will benefit in the long term through the enhanced sustainability of coal as a major energy source.
- Developers and users of clean coal technology in China will also benefit from the financial support that is provided to cooperative projects under the Australia China Joint Coordination Group on Clean Coal Technology.
What funding is the Government committing to this initiative?
- The Australian Government is establishing a $500 million National Clean Coal Fund to support the National Clean Coal Initiative. This fund will support activities and investments worth $1.5 billion in cooperation with the industry’s Coal21 initiative and support from other stakeholders including State Governments, researchers and industry.
Timeframe for delivery, ie when will the initiative commence and conclude?
- The National Clean Coal Initiative will commence from 1 July 2008 and support deployment strategies for low emission technologies out to 2030.
- The National Clean Coal Fund will support the National Clean Coal Initiative for its first seven years from 1 July 2008 to 30 June 2015.