The Australian Government’s Technology Investment Roadmap is a comprehensive and enduring investment strategy. It will accelerate the development and deployment of new and emerging low emissions technologies. The roadmap is the cornerstone of Australia’s Long-Term Emissions Reduction Plan.
A prosperous Australia, recognised as a global low emissions technology leader.
Australia’s big technology challenges
Australia’s technology-led approach to emissions reduction addresses the technology challenges and opportunities facing the country. These are:
- delivery of low-cost, clean and reliable energy to households and industry for transportation, heating, lighting and production
- expanding production and increasing productivity, creating jobs and substantially reducing emissions from Australia’s primary industries
- preserving and expanding onshore manufacturing of energy-intensive products and capturing new export markets for low emissions commodities
- scaling geological and biological sequestration to provide globally significant sequestration of CO₂.
In May 2020, the government released a discussion paper establishing a strategy for a technology-led approach to reduce emissions. This strategy, known as the Technology Investment Roadmap, set an enduring process to accelerate the development and commercialisation of new and emerging low emission technologies by:
- surveying new and emerging low emissions technologies across the economy
- identifying priority technologies through four filters: abatement potential, Australia’s comparative advantage, scale of economic benefit and where government action can make the most meaningful impact
- setting economic stretch goals for each priority technology to help achieve cost parity with existing high emissions technologies
- identifying deployment pathways for priority technologies
- balancing the overall investment in low emissions technologies
- measuring the impact of investments.
The roadmap aims to help low emissions technologies achieve cost parity with existing high emissions technologies.
We publish annual low emissions technology statements under the roadmap (Figure 1). These statements provide the opportunity to review and refine priority technologies, and the government’s investment approach, to deliver the best economic and emissions reduction outcomes for Australia.
LETS 2020 was the first milestone under the roadmap, identifying Australia’s big technology opportunities, introducing five initial priority low emissions technologies and articulating a comprehensive investment strategy. LETS 2021 builds on the first statement, prioritising an additional technology, identifying technology deployment pathways, committing to new actions and outlining the importance of enabling infrastructure to achieve our vision as a global low emissions technology leader.
Annual statements ensure our investment priorities and actions adapt to changing technology and market developments. Each annual statement focuses on key parts of the roadmap process to efficiently and transparently report on progress towards our vision.
Proven technologies like coal, gas, and wind electricity, where deployment is already being driven by the private sector, are not the focus of the roadmap, but the government may invest where there are market failures.
Diagram showing the technology investment roadmap process for the Low Emissions Technology Statements. The roadmap commences at 2020 with the first statement and continues to 2030.
The Technology Investment Roadmap is an enduring process for low emissions technology investments. Annual low emissions technology statements review, refine and evaluate investments. The roadmap is the cornerstone of Australia's Long-Term Emissions Reduction Plan.
The Low Emissions Technology Statement 2020:
- established prioritisation filters to assess low emissions technologies
- identified the first five priority technologies
- articulated a comprehensive investment framework.
The Low Emissions Technology Statement 2021:
- introduces ultra low-cost solar as an additional priority technology and stretch goal
- reviews and refines government actions and deployment pathways for priority technologies
- introduces enabling infrastructure as a new category to support priority and emerging technologies.
LETS 2021 introduces a new technology category, enabling infrastructure. We have also refined the emerging technologies category from LETS 2020 and merged it with ‘watching brief’ technologies.
Technologies with potential for transformative economic and abatement impacts, aligned with Australia’s comparative advantages, and where the government can make a difference.
Infrastructure that is critical for enabling commercial deployment of low emissions technologies. The government's first enabling infrastructure priorities are:
- battery charging and hydrogen refuelling stations to support consumer choice in electric vehicles
- a digital grid with enhanced management systems and capabilities to support rapid growth in solar and wind generation.
Emerging technologies have transformative potential, but require continued monitoring of global learning rates, research and investment trends.
LETS 2021 updates the government's list of emerging technologies. Livestock feed supplements and low emissions cement are two emerging low emissions technologies that show promise for prioritisation in future statements and will be supported by early investments.
Priority low emissions technologies and economic stretch goals
We prioritise low emissions technologies by assessing them against four filters:
- Abatement potential. How big are the potential emissions reductions from this technology?
- Economic benefit. What are the potential economic benefits for Australia of deploying this technology at a large scale? Benefits include creating and preserving jobs, especially in regional areas.
- Australia’s comparative advantage. Does this technology play to Australia’s strengths? Our strengths include abundant energy and mineral resources, skilled workers, strong institutions and trusted trading relationships with major energy consumers.
- Where government can make a difference. Will government investment help develop and deploy this technology? This includes whether government action will help accelerate cost reductions.
We also set an economic stretch goal for each technology (Figure 3). These ambitious, but realistic, goals aim to bring priority low emissions technologies to cost parity with existing high emissions technologies. Economic stretch goals also signal to private investors that priority low emissions technologies are of long-term strategic importance to the government.
A newly prioritised technology: ultra low-cost solar
This year’s statement adds ultra low-cost solar as a priority technology. This is based on Australia’s comparative advantage in solar technology and the need to accelerate cost reductions in clean electricity generation. Ultra low-cost solar will unlock the economic, employment and abatement potential of clean hydrogen, low emissions steel and aluminium, and electrical energy for storage for firming.
Ultra low-cost solar will also reduce costs for electrification of other sectors such as transport, buildings and industry. Driving the price of clean electricity lower will help Australian industry, manufacturers and other businesses stay internationally competitive while reducing emissions and supporting the wider economy.
We have set an economic stretch goal for ultra low-cost solar electricity generation at $15 per MWh, or approximately a third of today’s costs.
Priority technologies and their economic stretch goals:
- Clean hydrogen. Production under $2 per kilogram
- Ultra low-cost solar. Solar electricity generation at $15 per MWh
- Energy storage. Electricity from storage for firming under $100 per MWh
- Low emissions materials. Low emissions steel production under $700 per tonne and low emissions aluminium production under $2,200 per tonne
- Carbon capture and storage. CO₂ compression, hub transport and storage under $20 per tonne of CO₂
- Soil carbon. Measurement under $3 per hectare per year
Our technology-led approach is enduring, iterative and adaptive. We report our progress every year through annual Low Emissions Technology Statements. This ensures our investments are:
- lowering the cost of priority technologies
- attracting co-investment from others
- helping address Australia’s big technology challenges.
We have developed an impact evaluation framework to track progress, inform government decisions and maximise investment impacts. The framework tracks progress in three areas:
- Enabling policy and investments – policies and investments that help develop and deploy low emissions technologies.
- Co-investment and employment outcomes – co-investment in government-funded projects from the private sector and other jurisdictions, as well as jobs supported.
- Other technology, economic and abatement impacts – impacts the government aims to influence, but also influenced by external factors. These include:
- technology deployment and costs
- exports supported by priority technologies
- emissions reductions.
Reduce emissions and grow the economy
Australia is already reducing emissions while growing our economy.
The roadmap will build on this momentum and capture new opportunities. Our technology‑led approach will:
- build on our global reputation as a trusted exporter of energy, resources and agricultural products
- support jobs and take advantage of growth opportunities as the world shifts towards lower emissions
- power the domestic economy with cheap, clean and reliable energy.
The roadmap will guide at least $20 billion of Australian Government investment in low emissions technologies over the decade to 2030. We expect to drive over $60 billion in co-investment, which will result in at least $80 billion total public and private investment, and support 160,000 jobs.
Drive down costs
Australia’s technology-led approach aims to help new and emerging low emissions technologies achieve cost parity with existing high emissions technologies.
When alternative low emissions technologies can compete with existing technologies on price, they will be adopted at large scale across the economy, significantly reducing emissions without additional costs.
History has shown the non-linear relationship between technology costs and deployment. Our experience with globally significant technologies like transistors and solar demonstrates how falling costs and a concerted innovation effort can catalyse an exponential increase in deployment (Figure 4). Achieving rapid deployment growth for the priority technologies is the ultimate goal of the roadmap.
It took until 2002 for the world deploy its first gigawatt of solar generation. A decade later, 100 gigawatts had been deployed. By the end of 2022, we expect 1,000 gigawatts to be deployed. This means that 90% of all solar deployment has occurred in the last 10 years, as the cost of solar cells has fallen dramatically.
The cost of transistors declined from 100 US cents each in 1970 to 2 billionths of a cent each in 2012. This helped the average number of transistors per processor increase exponentially from 2000 in 1970 to 20 billion in 2012.
The global average cost of solar declined from US$35 per watt in 1980 to US$0.38 per watt in 2019. This helped global solar capacity increase exponentially from 0 gigawatts in 1980 to over 700 gigawatts in 2020.
Work with state governments, the private sector and other countries
Widespread deployment of low emissions technologies will mainly be driven by the private sector. The roadmap aims to attract an average of $3 or more co-investment for every $1 of Australian Government investment in the decade to 2030. The government is working with the private sector to achieve this goal.
State deals are bilateral energy and emissions reduction agreements that provide a clear way for the Australian Government, state and territory governments and industry to engage. They cover mutual priorities, including low emissions technologies, and can maximise government and private co-investment.
Australia is also working closely with other countries to develop and deploy low emissions technologies, including through bilateral partnerships. This:
- lets us share expertise with other nations
- supports innovation that makes low emissions technologies cheaper
- helps attract investment.
In 2020, the Prime Minister appointed Dr Alan Finkel, Australia’s former Chief Scientist, as Special Adviser to the Australian Government on Low Emissions Technology. Dr Finkel is brokering international partnerships on low emission technologies. Australia has already announced partnerships with Germany, Japan, the Republic of Korea, Singapore and the United Kingdom.
Expanding international collaboration will create new trade and economic opportunities. It will accelerate the development and expansion of international supply chains for low emissions technologies and energy, including clean hydrogen and its derivatives.
Australia’s international partnerships will deliver industry‑led projects to reduce costs and deploy low emissions technologies. These will expand low emissions industries and help Australia become a leading exporter of low emissions technology and energy.
Australia is also engaged in multilateral forums to accelerate the deployment of low emissions technologies. This includes Mission Innovation where Australia has gone from participating in every innovation challenge to co-leading the new Clean Hydrogen Mission and the Net Zero Industry Demonstration Mission. Fifteen member countries have committed to the Clean Hydrogen Mission’s goal to make clean hydrogen commercially viable by reducing the cost of production and delivery. The Industry Mission will foster collaboration to see pilots and large-scale demonstrations of low-emissions heavy industry technology.
Part of a whole-of-government strategy
The roadmap forms the cornerstone of Australia’s Long-Term Emissions Reduction Plan.
The roadmap complements and draws on other Australian Government policies and strategies, including:
- Australian Energy Market Operator (AEMO) Integrated System Plan
- Critical Minerals Strategy
- Emissions Reduction Fund
- Future Fuels Strategy (forthcoming)
- Global Resources Strategy
- Modern Manufacturing Strategy
- National Energy Productivity Plan
- National Hydrogen Strategy
- National Soil Strategy
- National Waste Policy and Action Plan
- Post-2025 Energy Market Reforms
Technology Investment Advisory Council
The Technology Investment Advisory Council advises the Minister for Industry, Energy and Emissions Reduction in preparing annual low emissions technology statements. The council is made up of leaders from science, business, technology and government.
- Dr Alan Finkel AO, Chair – Special Adviser to the Australian Government on Low Emissions Technology
- Drew Clarke AO PSM – Chair of AEMO and CSIRO Board Member
- Jo Evans – Deputy Secretary at the Department of Industry, Science, Energy and Resources
- Grant King – Chair of the Climate Change Authority
- David Parker AM – Chair of the Clean Energy Regulator
- Justin Punch – Chair of the Australian Renewable Energy Agency Board
- Steven Skala AO – Chair of the Clean Energy Finance Corporation Board
- Alison Watkins – Non-Executive Director of the Reserve Bank of Australia and Chancellor of the University of Tasmania
- Shemara Wikramanayake – CEO of Macquarie Group
- Ben Wilson – CEO of Australian Gas Infrastructure Group and Chair of Energy Networks Australia
Consultation and collaboration
Partnership with the private and research sectors is vital to achieving our vision.
The government has undertaken public and targeted consultation to inform the development and implementation of the roadmap.
Public consultation for the roadmap discussion paper in 2020 received around 500 written submissions. Over 150 businesses, researchers, community organisations and associations participated in targeted industry workshops, led by Dr Alan Finkel, and more than 400 people attended an online webinar.
This consultation, along with one-on-one industry, academia and cross-government engagement, informed the development of LETS 2020.
Consultation has continued for LETS 2021 with targeted industry consultation and new engagement with our international partners.
Ongoing consultation and collaboration is key. Achieving our vision is not possible without repeated and meaningful engagement. Following the release of LETS 2021, the government will undertake public and targeted consultation to inform the development of LETS 2022.