Australian Government Establishes $1 Billion Clean Energy Innovation Fund

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The Australian Government has established a $1 billion clean energy innovation fund, but has stripped its renewable energy agency’s funding in the process.

Last week, Australian Prime Minister Malcolm Turnbull announced the creation of a $1 billion Clean Energy Innovation Fund that is intended to support emerging renewable energy technologies to “make the leap from demonstration to commercial deployment.” However, industry trade insiders are concerned that the $1 billion in funding is only a shadow means to strip the Australian Renewable Energy Agency of $1.3 billion of its own budget.

Malcolm Turnbull, with his Minister for the Environment, Greg Hunt, in tow, announced the news last Wednesday. The $1 billion Fund “will drive innovation and create the jobs of the future, while delivering a financial benefit from the investment of public money.” Specifically, the Turnbull-Government expects the Fund to make $100 million available annually for the next ten years.

The Fund will be managed by Australia’s Clean Energy Finance Corporation (CEFC) and the Australian Renewable Energy Agency (ARENA), in addition to existing projects and funding already implemented under their respective umbrellas — which includes $2.5 billion in funding currently under the onus of ARENA.

“The creation of the CEIF will help innovative entrepreneurial companies build their commercial strength, so they can make a positive contribution to the Australian economy and our national emissions challenge,” said Oliver Yates, CEFC CEO, welcoming the announcement. “Innovation and entrepreneurial business activity is vital across all sectors of the Australian economy, especially in growth sectors such as clean energy, energy efficiency, and low emissions solutions.”

Ivor Frischknecht, the CEO of ARENA, also welcomed the Government’s “clear commitment to retain ARENA and the Clean Energy Finance Corporation.”

“ARENA’s investment track record speaks for itself. We look for at least matched funding and co-investment in the projects we support, and each dollar of ARENA funding has leveraged approximately 1.5 dollars of funding from other sources,” Frischknecht said.

However, though the move was generally welcomed by Australia’s renewable energy industry, there were some concerns raised.

“Today’s announcement indicates a positive shift towards clean energy by the Turnbull Government, following years of attacks on the CEFC and ARENA under former Prime Minister Tony Abbott,” said Claire O’Rourke, Solar Citizens National Director.

“However we have grave concerns that ARENA’s funding and grant making function will wither under the changes.”

Specifically, Solar Citizens is concerned that ongoing “research and development could be held back without ongoing support that ARENA has been providing” if the newly appointed $1 billion begins impinging on those same research and development grants. “Grants are essential to supporting new ideas and helping drive innovation at the cutting edge of the industry,” O’Rourke said.

Image Credit: Greg Hunt, Twitter