A giant surge of investment in renewable energy has been sparked by what might be the last grants made by the Australian Renewable Energy Agency, as the parliament is poised to cut most of its funding.
Large-scale solar will triple in size, with Arena today announcing the 12 winners of its $92m in grants, which together leverage more than $1bn investment from private companies.
The purpose of the grants was to establish a self-sustaining industry of large solar farms, by building competitiveness, bringing down costs and establishing a supply chain for the industry.
It appeared to be successful in doing that since, throughout the series of grants, the amount of grant funding needed for each project dropped from $1.60 per MW in 2014 to just 19c today.
As a result, projects in the new funding round required only 10% of their cost covered by grants to get off the ground, compared with about half of the cost three years ago. That meant the $92m spent by Arena in this round will be attracting almost $1bn in private investment.
“Today’s announcement is a very big deal,” Arena’s chief executive, Ivor Frischknecht, said at an announcement in Sydney.
“We have some of the best solar resources in the world, and we lead the world in terms of rooftop solar, but we have been lagging in terms of large-scale solar deployment. That’s about to change over the next 12 months.”
When complete, the solar farms will triple the amount of large-scale solar in Australia – from the current 240MW to 720MW – powering 150,000 average Australian homes and fulfilling 10% of the renewable energy target for 2020.
The biggest winner of the new grants was Queensland, where six projects would deliver 300.1MW. That will be done with $51.4m from Arena and $637.4m in total investment.
Queensland’s minister for energy, Mark Bailey, said at the announcement: “For Queensland, today is a momentous day. We are seeing a new industry start.
“It means more than 500 regional jobs, with hundreds of indirect jobs consequently as well, which is fantastic news for communities for instance around Whitsunday and Collinsville, areas that have struggled as the mining industry has gone through a transitional phase.”
Arena gave funding to five projects in New South Wales, with a total capacity of 162.3MW and the remaining 20MW project in Western Australia.
The chief executive of the Clean Energy Council, Kane Thornton, said: “The holy grail, I think it’s fair to say, is now within reach. And that is the ability to produce electricity from the sun cheaper than any other form of new electricity generation.”
Last week, the Turnbull government entered its “omnibus” savings bill to parliament, which seeks to pass all the cuts that Labor agreed to before the election. That includes a $1bn cut to Arena, removing the future capacity of the agency to make grants, potentially making today’s announcement the last round of grants from the agency.
Jack Curtis, the Asia-Pacific regional manager at the world’s biggest solar company, FirstSolar, said: “I find it particularly mystifying and disappointing that the government with a stated commitment to innovation and new industry creation would seek to constrain one of its own agencies that has been so effective at contributing to both of these goals.”
Thornton said: “These types of extraordinary developments we’ve heard today would essentially be kneecapped. And we think that would be a tragedy for this country.”
Solar Citizens, a group that represents and campaigns for solar energy in Australia, analysed which federal seats each of the projects fell into and found all but one were in Coalition-held seats, except for one, which was in Bob Katter’s seat of Kennedy.
The national director of Solar Citizens, Claire O’Rourke, told Guardian Australia: “It’s a strong reminder for Coalition MPs, who are tied to efforts to destroy Arena’s future, that Arena projects are helping to fuel regional communities across Australia.
“To put it simply – it’s stupid. Stupid politics, stupid economics and stupid policy.”
Despite not opposing the measure before the election, Labor has left open the possibility of opposing the cut, which would mean voting against the entire omnibus bill.
The Greens’ energy and climate spokesman, Adam Bandt, today urged Labor to block the cuts.
“Bill Shorten, don’t kill renewable energy innovation. Don’t kill Arena,” Bandt said. “Bill Shorten needs to listen to energy companies, the CSIRO, university solar researchers and the Australian people who all say Arena’s funding should continue.
“Australia could be a renewable energy superpower, yet we have a government intent on sending us back to the dark ages by cutting clean energy while simultaneously handing out billions to the fossil fuel industry and an opposition who may wave through these cuts.”
