The future of renewable energy funding

7763506-3x2-940x627Renewable energy researchers in Australia are regarded as some of the best in the world, and in the field of solar power especially, statistics and projections suggest Australia is an industry leader. The PERC solar cell, for example, developed by researchers at ANU and the University of New South Wales (UNSW), is now commonplace in solar-panel production globally and worth some $9 billion a year. Estimates say PERC cells will be a standard feature in more than half of all solar panels produced globally by 2020, and will save around $750 million in electricity production costs within Australia over the next 10 years.

Advances like these have helped bring about the recent global boom in solar power, and Australia has continued to contribute personnel, technology and expertise to the biggest solar power manufacturers around the world. This contribution has only been possible because of the establishment of various renewable energy funding agencies in Australia in the last 30 to 40 years. The current funding program ARENA (Australian Renewable Energy Agency) possesses around $2.5 billion in grant money, and is the lifeblood of renewable energy research in universities such as ANU, and of renewable power projects scattered across the country.

The future of ARENA, however, looks grim, as the Turnbull government is currently attempting to pass a budget saving bill that would abolish nearly all of ARENA’s funds. If this bill is passed, ARENA will be absorbed into the existing Clean Energy Innovation Fund, which provides debt and equity financing for renewable energy projects, and requires loan repayments. The reality of early-stage research, however, is that it typically does not yield income streams. This means that if ARENA is abolished, many innovative vanguard projects and university researchers will have to halt their work.

According to ANU Professor Andrew Blakers, a leading renewables researcher and co-inventor of the PERC cell, “severe curtailment of ARENA grants will cause a loss of [Australia’s] leadership, a loss of commercial opportunities, the loss of hundreds of jobs, and the severe downscaling of PhD and undergraduate student opportunities.” The ARENA cut has even been described by the Clean Energy Council as “plunging into the clean energy valley of death.” At the ANU alone, dozens of jobs and many cutting-edge projects will be in doubt.

It seems counterintuitive that the current government wants to push through cuts to ARENA funds given the administration’s focus is on innovation, ‘jobs and growth’, coupled with the fact that Malcolm Turnbull believes in climate change (unlike his predecessor, Tony Abbott). Significant climate change commitments have also recently been made. The Paris Agreement was signed this year, forwarding a target to reduce the pollution levels of 2005 by 26-28% by 2030, and many states have announced ambitious renewable energy targets to meet this goal. The ACT government, for example, announced recently that it plans to have the ACT powered with 100% renewable energy by 2020.

The reality is that ARENA-funded research and projects are fundamental for reaching these renewable energy targets. There are various economic, technical and regulatory challenges that need to be overcome in order to integrate wind and solar power into the Australian grid. ARENA-funded research has already been working to mitigate these challenges in recent years. Several ARENA-funded projects already demonstrate the potential benefits of emerging technologies and systems, and create familiarity between investors and the renewables sector.

Perhaps the most compelling argument against the ARENA cut is that there now seems to be a dependable pathway toward achieving a sustainable, eco-friendly society, that is truly free of non-renewable energy: the use of batteries to store power generated from renewable sources. This has been described as the ‘holy grail’ of energy policy. If battery storage technology is perfected, the problem of sustaining electricity when the sun doesn’t shine or when the wind doesn’t blow would be solved. This was not thought possible until recently with breakthrough after breakthrough in battery storage technology and efficiency, and the cost of batteries has dramatically decreased as a result. Large corporations like Tesla have grand plans concerning battery storage, while the world’s biggest oil companies are spending billions on related research to diversify their interests.

Incidentally, the ACT government has just announced that it will donate up to $5 million towards ANU’s Energy Change Institute (ECI) for the new Battery Storage and Integration Research program. The ANU also announced that it will contribute another $3 million to the program, with $2 million going towards new lab infrastructure to support the research. This funding boost will not replace ARENA funding in the ANU – which totals over $15 million – but will help to establish an entirely new research area within the ECI, and link existing battery storage-related research within the Research Schools of Chemistry and Engineering.

Australia is well placed to make the vision for a future sustained entirely by renewable energy a reality. It is now up to our politicians to show some courage. Tackling climate change requires the support of science and research, and requires every possible measure be taken. We are already seeing the impacts of climate change unfold around the world, from the increased frequency and strength of natural disasters, to the world’s first ‘climate refugees’ recorded this year in the United States and Papua New Guinea. If we leave renewable energy too late, the damage caused by climate change will be irreversible, and will affect us all.

Image from http://www.abc.net.au/news/2016-09-02/doubts-in-renewable-energy-funding-leads-to-project-suspensions/7810450