Chair and CEO review
Helping Australia’s energy system manage an increasing share of renewables and different ways of operating has been an important focus for ARENA this year.
This economy-wide transformation is profound, complex and gathering pace as technology costs decline, new business opportunities emerge, and consumers, as well as businesses, increasingly demand more choice and more control over their energy source, use and cost.
ARENA is playing an instrumental role in funding and assisting this transition. We act as a connector, bringing stakeholders together and leading innovation and issue-solving across sectors, businesses, governments and industry organisations.
We have actively identified and are helping to troubleshoot issues arising from the changing energy system – from technological and commercial issues to regulatory and market barriers. We have also funded projects and research and provided advice throughout the course of this year that is helping to solve some of these economy-wide issues.
This energy transition increasingly involves sectors such as transport, heavy industry and the built environment, which are critical in the pursuit of lower emissions and ensuring Australia meets its international commitments. ARENA’s investment priorities and activities have targeted these key sectors during 2018-19.
ARENA invests in projects spanning the innovation chain, from research to early-stage deployment, to help push first-of-a-kind energy technologies and business models towards commercial viability. Without our support, the pathway to commercialisation would be blocked for many of these new technologies and businesses.
ARENA is committed to achieving maximum impact and value from the projects we fund. We work closely with our project proponents to ensure we progress high-quality applications through our approval processes.
In 2018-19, we committed $188.1 million to 79 new projects with a total value of $1.3 billion, and managed 254 active projects.
Our investment is aimed at:
- improving energy system reliability through the development and commercialisation of solutions such as large-scale batteries, pumped hydro and hydrogen
- increasing system security and reliability such as using wind farms to provide grid support services
- empowering consumers through their distributed energy resources, including finding methods to coordinate and integrate rooftop PV, home battery storage and energy management systems.
We are pleased to showcase some of these in this Annual Report.
FOCUS ON DISPATCHABLE TECHNOLOGIES
As the National Electricity Market progresses towards higher shares of variable renewable generation, there is a growing need for more dispatchable technologies.
Pumped hydro provides a viable solution for medium to long-term energy storage, which will be critical in a power system with high shares of variable generation. ARENA funded a study to assess the feasibility of expanding the Shoalhaven Pumped Hydro Scheme in NSW, which could potentially double its capacity. Work also continued on Tasmania’s Battery of the Nation initiative and other projects across a number of states.
Large-scale battery systems present a significant opportunity as they can provide short-term energy storage at increasingly competitive costs. They contribute to system reliability and provide essential system services and operational and network benefits.
Four ‘big battery’ projects (two in Victoria and two in South Australia) demonstrated innovative technologies and operating capabilities this year that progressed the status of large-scale battery systems in Australia. The capabilities that these projects have demonstrated, and their value in the renewable energy transition for delivering secure, reliable and affordable energy, are discussed in the Annual Performance Statement section.
EMPOWERING ENERGY CONSUMERS
Rooftop solar, batteries and other customer-related energy technologies are set to play a key role in shaping the future energy system. It is projected that up to half of all Australian households will have solar and/or batteries within the next few decades, up from around twenty per cent today. This is a huge change and will require continued innovation in software, hardware and thinking to achieve the best outcome for consumers.
This year, ARENA funded some of the leading experts in the energy sector to build network hosting capacity technology and further understand the impacts of Distributed Energy Resources (DER). Increasing network hosting capacity will allow more DER (such as rooftop solar) to be connected and operate while remaining within the technical limits of our electricity grid. This work is ongoing but we are excited to be exploring and hopefully solving some of these important consumer energy challenges.
Australia made an international commitment to double its clean energy research and development investments by 2020-21 through the Mission Innovation initiative. ARENA plays an important role in meeting this pledge and we committed $29.7 million to 24 new Mission Innovation eligible projects this year and spent $39.1 million on existing eligible research and development projects.
MAXIMISING BENEFITS TO THE ECONOMY
A key part of ARENA’s work is to build knowledge that can be shared openly to help industry and government better navigate the energy transition. Information and ‘lessons learnt’ also help to de-risk follow-on projects, accelerate deployment of safe and commercially viable technologies, increase public understanding and confidence in new technologies, and support capability development.
This year we conducted two major ARENA Insights Forums that attracted more than 300 participants. We also led workshops and industry events in which relevant industry players and state governments shared lessons learnt from ARENA projects and solutions to the challenges and opportunities of integrating renewable energy technologies into the electricity grid. ARENA representatives also attended and spoke at many industry events and stakeholder meetings across the country.
ARENA’s impact is demonstrated in how we are ensuring the private sector has the right tools, technology options and business models to deliver secure and reliable renewable energy. We are also working with key decision-makers in both government and industry, building the knowledge, data and skills to navigate the challenging energy system transition.
As a small organisation we have developed a highly effective team-based way of working that enables us to make best use of complementary skills and Agency resources and to maintain high efficiency in our business activities.
We would like to acknowledge the many people and organisations that have worked with ARENA and supported our efforts in 2018-19. ARENA’s continuing contribution is made possible with the commitment and guidance provided by the Board; the hard work and commercial focus of the ARENA team; the vision, ingenuity and determination of our project proponents; and the support of the Australian community.
ARENA continues to deliver lasting benefits for the broader economy and we see our work directly complementing the Australian Government’s efforts to make energy more affordable for industries and consumers. We thank our Ministers during the reporting period, the Hon Josh Frydenberg MP and the Hon Angus Taylor MP, for their support and ongoing interest in ARENA’s important work.
Martijn Wilder AM