Federal government moves to slash ARENA funding

Renewable energy advocates have spoken out agains the Coalition’s previously foreshadowed move to reduce funding to the Australian Renewable Energy Agency (ARENA), introduced as a provision in the government’s draft legislation to repeal the carbon tax introduced under Labour. ARENA is the federal agency tasked with improving cost-competitiveness and increasing supply of renewable energy technologies in Australia by supporting research & development, funding specific projects (including large-scale solar farms). and collecting & disseminating knowledge about renewables. The funding cuts will not have an impact on projects currently underway or on the agency’s budget for this year, but they would reduce ARENA’s capacity to fulfill its mission in the coming years. To date, around 181 renewable energy projects have received or are receiving support from ARENA.

Clean Energy Council Deputy Chief Executive Kane Thornton was critical of the decision, which would cut $435m from ARENA’s budget over the next 3 years. Preserving the agency’s budget, he argues, will help to insulate Australian households and businesses against future electricity price rises–as well as be in line with the Coalition’s pre-election promises.

“The government gave repeated commitments on its support for ARENA prior to the election and it is disappointing that the agency is now facing a significant budget reduction,” Mr Thornton said in a media release. “Investing in new forms of renewable energy now will help to diversify our energy sector and reduce our reliance on gas power in the future, which is predicted to more than triple in cost between now and the end of the decade. These exciting technologies have been starting to show immense promise, coming down in cost and becoming more efficient.”

Australian Solar Council executive John Grimes called out the government on the apparent inconsistency of its approach to renewable energy, referring to the Coalition’s plans as ‘an own goal for direct action’. “The work that ARENA does is an example of Direct Action,” he said. Although the government came to power with its own plans for addressing climate change and supporting renewables, to date it has been quick to take the axe to programs and funds without introducing any new, proactive measures. “The determination of this government to abolish the carbon tax has been absolute, but there seems to be no urgency when it comes to the government’s own climate programs,” Mr Grimes notes.

The comments about the proposed cuts on ARENA’s website are predictably more neutrally worded. “ARENA’s total funding envelope, including committed (and spent) funds remains substantial at around $2.5 billion including $1.5 billion in the out years,” the site reads. The agency is in the process of determining how the budget cuts will impact existing and upcoming projects, but notes that it is still accepting applications for funding through its 4 flagship initiatives: the Emerging Renewables Program, the Accelerated Step Change Initiative, the Community and Regional Renewable Energy Program and the Regional Australia’s Renewables–Industry Program.

© 2013 Solar Choice Pty Ltd

James Martin II

Contributor at Solar Choice
James was Solar Choice's primary writer & researcher between 2010 and 2018.

He is now the communications manager for energy technology startup SwitchDin, but remains an occasional contributor to the Solar Choice blog.

James lives in Newcastle in a house with a weird solar system.
James Martin II