With the recent extension of the Australian Renewable Energy Agency’s (ARENA) funding, the industry breathed a sign of relief. ARENA has funded more than 550 projects so far, adding on average one new project each week. We speak with ARENA CEO Darren Miller about the important role the organisation plays in Australia’s energy landscape.
You’ve been CEO since 2018 – what has been your focus since then?
I became CEO of ARENA at a time where the energy sector was undergoing a significant transformation as the shift towards renewable energy really gathered momentum. The electricity system is transitioning to deal with an increasing share of renewables and we have also had to identify solutions to reduce emissions in sectors such as transport and heavy industry in order to meet our international commitments. A key focus so far has been to shift ARENA’s focus towards new emerging technologies and renewable energy solutions, which is why we introduced new investment priorities for the Agency. Our priorities – Integrating Renewables into the Electricity System, Accelerating Hydrogen and Supporting Industry to Reduce Emissions – align closely with the Australian Government’s Technology Investment Roadmap First Low Emissions Technology Statement to develop and commercialise low emission technologies.
What challenges have you experienced in the role?
One of the main challenges has just been getting across the breadth of projects and work that ARENA does. We have funded over 550 projects so far and we’re adding on average one new project to our portfolio every week. There are so many interesting technologies and projects all over Australia and it has been thrilling and challenging at the same time to learn about all of these activities and be able to consolidate what we’re seeing and learning into a simple coherent story.
The federal government recently announced a funding extension for ARENA. What did that mean for the organisation?
We were delighted to see ARENA’s important role acknowledged with the Prime Minister and Minister for Energy and Emissions Reduction recently announcing a total funding package of $1.62 billion over the next twelve years including guaranteed baseline funding of $1.43 billion to allow us to deliver on the technologies highlighted in the First Low Emissions Technology Statement. The funding secures our future and allows us to continue to work with energy industry participants, the Clean Energy Finance Corporation, research institutions and other agencies to support low emission technologies across the innovation chain.
What are the key considerations when looking at investing in projects?
ARENA’s current investment priorities play a key role at guiding which new technology areas we are looking to invest in. Technology and innovation in these areas are critical to the energy transitions and to Australia’s efforts to reduce emissions and create new economic opportunities. For instance we have recently run funding rounds around renewable hydrogen, solar research and development and short term forecasting for wind and solar farms. Apart from looking at the alignment with our investment priorities we are also assessing the capability of the applicants, the design of their program of work, the amount of co-funding they are bringing to the table and their willingness to share knowledge publicly.
How are we stabilising the grid with an influx of renewables?
We’ve had enormous success in helping to support large-scale solar and bringing in a lot of renewable energy generation to the grid, and now ARENA has shifted its focus onto ways to help stabilise the grid as the penetration of these assets continually grows and older forms of energy generation are retired. These include funding projects to do with hydrogen, large scale battery storage, pumped hydro, virtual power plants, distributed energy and even electric vehicles.
At a grid scale, we’ve got challenges associated with marginal loss factors, how we deliver system services like inertia and FCAS with energy storage, how we manage demand shortfalls as thermal generation retires and how we plan the transmission infrastructure needed to support new generation assets in weak areas of the grid. A significant achievement for ARENA recently has been our investments in large scale batteries, such as the Hornsdale Power Reserve in South Australia and the Gannawarra and Ballarat Energy Storage Systems in Victoria. Through these projects we’ve been able to highlight the importance of large-scale batteries in ensuring reliability of supply and support for power system security in demonstrating inertia, expanded FCAS functionality and providing essential services to the grid.
What are your hopes for the Australian hydrogen industry?
A renewable hydrogen industry could play a significant role in generating jobs and economic benefits for Australia. Renewable hydrogen represents a major future export opportunity. As the world seeks to reduce emissions, the demand for hydrogen is expected to grow significantly, with countries like Japan, South Korea and Germany already looking to become large-scale importers of hydrogen within a decade. Australia is well positioned to become a leader in exporting renewable hydrogen, already having large amounts of wind and solar resources and existing infrastructure like gas terminals and ports, as well as already developed supply chains and existing trade partners. We could essentially ship our sunshine to the world in the form of hydrogen. ARENA’s role in all of this is to help to reduce the cost of renewable hydrogen and a key part of doing this is reducing the cost of technology behind the production. ARENA is currently undertaking a $70 million hydrogen funding round to advance electrolyser technologies in the hopes of kickstarting the renewable hydrogen industry in Australia.
Are there any states/territories that are doing an exemplary job incorporating renewables?
ARENA has a very good working relationship with all state and territory governments including co-funding a range of projects and technologies. Some of these projects involve large scale energy storage (such as the Battery of the Nation in Tasmania, two grid-scale batteries in Victoria, grid-scale batteries and VPPs in SA and PHES projects in SA, NSW and QLD) as well as developing Renewable Energy Zones and key transmission infrastructure (such as Project Marrinus and NSW’s Central West Energy Zone). Other states like Western Australia and Queensland are looking into the potential of hydrogen with a number of feasibility studies already underway.
With the help of ARENA and the Australian Government, we have contributed to the feasibility works of many of these projects and we continue to look for opportunities that will assist with the further uptake of renewable energy technologies.
And are there any international examples we should be looking to as a gold standard?
There are certainly a number of countries we look to as gold standard. Germany is certainly becoming a leader in the hydrogen space, with significant penetration of renewable energy already in place. The Australian Government has also recently signed an MOU with Germany to further explore hydrogen export opportunities.
The exciting thing about Australia’s position is that a lot of countries look at us as the gold standard. We have the highest amount of renewable energy per capita, with vast amounts of rooftop solar and cutting edge grid scale batteries helping to firm up the grid. We are certainly emerging as a leader in the renewables space and it’s a very exciting time to be involved in the sector.
What does the future of the Australian energy landscape look like in five and 10 years?
It’s very hard to forecast as to how Australia’s energy landscape will look like. With things changing so quickly we need as many options as possible to solve the challenge. At ARENA we are aiming to back a number of technologies across the emissions reduction landscape so that the commercial market has options to deploy in the future. In 10 years I’d hope that we have a largely renewable electricity system, with electric vehicles increasing in uptake, developing hydrogen and green metals export opportunities and increased uptake of energy efficiency solutions within industry. The aim is to have a world leading renewables sector with smart technology integrated into homes and businesses managing energy usage to lower prices for consumers.
Is there anything you would like to add/share with your peers?
Progress is always challenging, but there are so many reasons to be optimistic about the future of the energy sector. At ARENA we’re working with businesses who are looking into the cutting edge of renewable energy solutions. I’m confident that we have, or will have in the future, the technology to further reduce energy emissions and solve the problem. We all just need to get behind it and aspire to lead and prosper in this new world.
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