Additional flexibility for ARENA and the CEFC
ARENA and the CEFC have a proven record of driving down costs of new and emerging low emissions technologies. The Government is exploring ways to give these agencies a broader range of tools to de-risk investments and accelerate commercial uptake of priority low emissions technologies.
In line with the King Review, the Government intends to expand the remit of ARENA and the CEFC so they are able to support a broader range of technologies that reduce emissions across all sectors of the economy. It is intended that both agencies can support energy efficiency technologies, low emissions technologies (including in the agriculture and land sectors) and renewable energy technologies.
This will give those agencies the flexibility to align their investments with Statement priorities, noting they will continue to make their own investment decisions independently of government. Meeting our long-term emissions reduction goals requires new technologies to be adopted across the economy, so this will expand the toolkit available to the Government to unlock critical technologies in all sectors.
ARENA will also be encouraged to run challenge-based funding rounds to unlock technological and commercial barriers to realising priority challenges and opportunities.
Targeted regulatory actions can streamline the flow of private sector capital. This includes, for example, the Government’s recent commitment to deliver a regulatory pathway for offshore clean energy projects, including transmission and wind energy. The Government will work with states and territories, industry and the broader community to remove regulatory barriers and identify targeted policy adjustments.
Translating early-stage research to business opportunities
An ongoing priority area for the Government will be supporting the investment environment for early-stage research and development, particularly with respect to translating Australian research into new business opportunities. While Australia is strong in knowledge creation, we underperform in knowledge translation and research commercialisation. A relatively low proportion of Australian businesses introduce product or process innovations that arise from research and development activities.
In addition to ARENA and the CEFC, a number of existing broad- based programs, such as the CSIRO Innovation Fund, the Early Stage Venture Capital Limited Partnerships, and the Tax Incentives for Early Stage Investors, are designed to address these issues by encouraging investment in innovative companies developing and commercialising new technologies.
Box 5: Learning from australia’s contribution to solar pv’s global success
Solar PV is the world’s third-largest renewable electricity technology (after hydroelectricity and wind), and will be an increasingly important technology for lowering emissions.
Australian innovation is at the heart of solar PV’s global success. Since the 1980s, solar researchers at the University of NSW have frequently broken world energy conversion efficiency records for solar PV. By some industry estimates, PV technology developed by the university is now used in almost 80% of today’s global solar PV manufacturing.
There are lessons to learn – in both successes and failures – from solar PV’s path to maturity if we want to bring technology’s benefits to Australia.
First, the global demand for products is key to their ability to move down the cost curve. The Australian market, while important, is too small on its own to drive these results. A number of countries, notably Germany, used mandates to drive solar technology into their markets. Mandates for technology uptake in Australia are unlikely to make a material difference to cost reductions and are not consistent with the principle of driving down costs rather than imposing burdens on consumers. Increasing global demand is a key factor to consider when looking for technologies that we could support through a comparative advantage.
Second, while Australian universities have played an important role in developing solar PV, Australia has not reaped the full rewards that might have come from being more strategic in translating early stage research into commercial opportunities.
The Low Emissions Technology Statement is an opportunity to think strategically about how we can develop technologies to maximise advantages for Australia.
Long-term investments in skills
Developing a workforce with the right skills and expertise is crucial to capturing the opportunities associated with low emissions technologies and global markets. Highly skilled workers will be needed to create, develop and implement technological solutions so Australia can realise its comparative advantages. New and expanded existing industries will need a workforce with general capabilities (e.g. communication, problem solving and digital literacy) along with discipline-specific skills in fields like construction, physical sciences, engineering, project management and data analytics.
The Government’s $585 million Skills Package – Delivering skills for today and tomorrow – is helping train highly skilled and qualified workers, including in regional areas, to meet the needs of businesses. As part of this package, the National Skills Commission has been established to oversee the Government’s investment in vocational education and training, and drive research and analysis of future skills needs across industry.
Trade and Investment
Most priority low emissions technologies depend on global supply chains to achieve scale. Targeted international collaboration to remove the trade and investment barriers facing those technologies, and achieve greater harmonisation of standards and certification, will help to accelerate the deployment of these technologies.
Better information for investors regarding Australia’s technology capabilities
The Government is developing a Technology Investment Roadmap data portal. The portal will encourage investment in low emissions technologies in Australia, providing high quality geospatial analysis tools and data for understanding Australia’s low emissions technology potential. Focusing on the priority technology stretch goals, the online tool will use key national-scale datasets, such as locations of existing infrastructure, energy, and critical mineral resources, to support investment decisions.
Maintaining and expanding the technical skill capability of our institutions and workforce must be a priority.