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Priority technologies

Existing priority technologies

Priority technologies are the focus for government investment. The following five priority low emissions technologies and economic stretch goals were introduced in the Low Emissions Technology Statement (LETS) 2020. Accompanying economic stretch goals are ambitious but realistic goals to bring priority low emissions technologies to cost parity with existing high emissions technologies.

Priority technologies are selected based on abatement potential, scale of economic benefit, Australia’s comparative advantage and responsiveness to government investment.

Clean hydrogen

Stretch goal: production under $2 per kg.

Clean hydrogen is a transformative fuel that can be used to power vehicles, generate heat and electricity, and serve as a feedstock in industrial applications. It also allows for the export of renewable and low emissions energy, either as clean hydrogen or a hydrogen derivative such as clean ammonia. Australia’s competitive advantages – abundant land and solar and wind energy, extensive carbon storage reservoirs, and excellent reputation as a trusted energy exporter – mean we are well positioned to be a world leading clean hydrogen producer.

Energy storage

Stretch goal: electricity from storage for firming under $100 per MWh.

Grid-scale electrical energy storage will be an essential element of Australia’s future electricity system. Broad deployment of electrical energy storage will facilitate further integration of low-cost solar and wind electricity in the grid. Energy storage will provide system security services and be a source of reliable, dispatchable electricity, and reduce pressure on electricity prices by meeting peaks in consumer demand.

Low emissions materials

Stretch goal: low emissions steel production under $700 per tonne and low emissions aluminium production under $2,200 per tonne.

Steel and aluminium are important global commodities and thousands of people are employed in these industries in Australia, many in regional areas. Australia can help to unlock the technologies that will reduce emissions from these sectors across the supply chain, from mining to refined products.

Carbon capture and storage (CCS)

Stretch goal: CO₂ compression, hub transport, and storage under $20 per tonne of CO₂.

Large-scale deployment of CCS will underpin new low emissions industries (including hydrogen) and provide a potential decarbonisation pathway for hard-to-abate industries such as natural gas processing and cement.

Australia has a comparative advantage in CO₂ transport and storage, with a number of sources of CO₂ located close to suitable geological storage basins and with established pipeline easements between the two.

Soil carbon

Stretch goal: soil carbon measurement under $3 per hectare per year.

Australia has untapped potential as a globally significant source of carbon sequestration in our soils. Offsets created by soil carbon projects can provide a valuable additional revenue stream for farmers, and provide decarbonisation pathways for new and existing industries, while preserving and creating jobs.

Furthermore, increasing the soil carbon concentration (in the form of organic material) may improve farm productivity and crop yields through better nutrient and water retention, boosting resilience to drought and erosion.

A newly prioritised technology – ultra low-cost solar

This year, we introduce ultra low-cost solar as a sixth priority technology, with an economic stretch goal for solar electricity generation at $15 per MWh, or approximately a third of today’s costs..

Low-cost, clean electricity is key to reducing the costs of other priority low emissions technologies. It will unlock economic, employment and abatement potential for clean hydrogen, low emissions steel and aluminium, and electrical energy storage for firming. Low-cost electricity will also be important for operating compressors used in CCS. Achieving $15 per MWh for solar electricity generation could help deliver the world’s lowest cost clean electricity, enabling Australian manufacturers and businesses to stay competitive and support the wider economy.

Advances in solar technology will reduce the cost of unfirmed electricity supply in Australia. Achievement of this stretch goal would see reductions in the cost of solar outpace reductions in wind energy, enhancing a source of Australian comparative advantage.

High penetration levels of ultra low-cost solar electricity in our grid will require the successful implementation of other priority technologies, enabling infrastructure and market reforms, including energy storage, the digital grid and recognition of the importance of dispatchable capacity in electricity markets. In the meantime, Australia’s existing thermal generation fleet will continue an essential role in meeting customer and grid firming needs.

Australia’s comparative advantage

Annual solar irradiation in Australia is the highest per square metre in the world, and we have significant land-mass suitable for large-scale solar developments, and proximity to large and growing markets.[10]

Australia’s researchers have played a world-leading role in the development of commercially viable solar technologies, going back to the 1960s. Australian developed passivated emitter rear cell (PERC) technology is used in 90% of today’s global solar photovoltaic (PV) manufacturing. Our universities and companies continue to develop cutting-edge technology to increase cell efficiency and reduce cost.

Economic stretch goal – ultra low-cost solar electricity generation at $15 per MWh

Solar electricity generation at $15 per MWh would fast-track Australia’s ability to meet the clean hydrogen stretch goal of production under $2 per kg, and increase our competitiveness in hydrogen export markets.[11] It would also support cost-competitive production of low emissions steel and aluminium, and direct air capture of CO₂ (an emerging technology).

The $15 per MWh stretch goal for ultra low-cost solar has been set taking into consideration current and projected costs for utility-scale solar electricity, and alignment with international benchmarks.[12],[13],[14] The stretch goal assumes utility-scale solar PV without network or firming costs, and without subsidies.[15]

Solar 30 30 30

Reaching the stretch goal will require further innovation in the efficiency of solar modules and optimisation of large scale deployment. The government will work toward achieving 30% module efficiency at 30 cents per installed watt by 2030.

Australia is well positioned to drive the next phase of cost reductions in solar PV through a two-pronged approach across solar cell R&D, and innovation in assembly and deployment methods. In particular, there are two significant levers to facilitate cost reductions for solar electricity:

  • improving module efficiency from about 22% to 30%
  • reducing balance of plant costs by approximately 70%.


  1. Geoscience Australia, Solar Energy, accessed 9 August 2021
  2. Clean hydrogen production under $2 per kg requires clean electricity at around $20 per MWh, however to increase Australia’s competitiveness in hydrogen exports, production costs closer to $1 per kg will ultimately be required, necessitating lower electricity costs.
  3. BloombergNEF, 1H 2021 LCOE Update, accessed 9 August 2021
  4. Graham P, Hayward J, Foster J, Havas L 2021, GenCost 2020-21: Final report, CSIRO, accessed 5 August 2021
  5. US Office of Energy Efficiency & Renewable Energy, Solar Energy Technologies Office Updated 2030 Goals for Utility-Scale Photovoltaics, accessed 9 August 2021
  6. Other assumptions include: 25% capacity factor, 5.9% WACC, and 25 year operating life.