The Australian Renewable Energy Agency (ARENA) will continue its work in the renewables research and development sector, following an eleventh hour deal between the government and opposition.
Intense industry and political pressure was placed on the government to continue funding ARENA, or find ways to recoup costs to the research and development fund.
Following a deal brokered by Treasurer Scott Morrison and the opposition to pass the Budget Cuts (Omnibus) Bill in parliament this week, ARENA will receive $800 million in funding over five years, a cut of $500 million. The government also proposes to merge ARENA with the Clean Energy Finance Corporation.
Chief executive of the Clean Energy Council Kane Thornton said the decision to cut funding would ‘rattle the confidence of investors’.
“While the $800 million that Labor has proposed to leave in ARENA’s future budget would allow it to continue many critical functions, the extent and rate it can bring forward exciting new technologies will clearly be constrained,” he said.
“We hope that the Australian Parliament will now move quickly to resolve this situation and give the clean energy industry some certainty in the future of ARENA, allowing businesses to invest in innovation that can transition the Australian energy sector.”
Energy program director of the Grattan Institute Tony Wood said the new model would need to integrate grant funding and debt and equity funding to commercialise clean energy, but was pleased ARENA would live on in a different form.
“Living for another day is never a bad outcome.”