Gov’t removal of ARENA’s grant-funding powers means bigger ‘valley of death’ for new technologies

The federal government’s decision to remove the grant-funding ability the Australian Renewable Energy Agency will make it harder for new technologies to bridge the “valley of death”, an Agency adviser has said.

The Coalition announced last month it would scrap the $1.3 billion in legislated but uncommitted funds from ARENA, although it would preserve the agency by giving it a new role “advising” on the new Clean Energy Innovation Fund.

The CEIF, using $1 billion of previously allocated funds from the Clean Energy Finance Corporation, will only invest in equity and finance, so it could retrieve its investment rather than handing them out through grants.

The CEIF was welcomed, but the removal of the grant-based funding was questioned by many, including the former ARENA chairman Greg Bourne, who said that it would remove an important funding mechanism that was critical for early-stage technologies and R&D.

Last Thursday, Danny De Schutter, ARENA’s senior strategy consultant, said the changes flagged by the government would represent a “considerable shift” in the agency’s ability to support early stage innovation.

“The valley of death  … that sits between R&D and development … needs a bridge to cross,” de Schutter told the SolarExpo conference in Melbourne. “The CEIF as announced will provide one end of that bridge. The question is what is at other end of that bridge and where that will meet in the middle.”

De Schutter said ARENA was looking at that issue so it could respond when the changes were passed through parliament.

© 2016 Solar Choice Pty Ltd

Giles Parkinson

Giles Parkinson regularly contributes unique content to Solar Choice News. Giles is the founder and editor of clean energy industry news service RenewEconomy. He is a journalist of 30 years experience, a former Business Editor and Deputy Editor of the Financial Review, a columnist for The Bulletin magazine and The Australian, and the founding editor of Climate Spectator.
Giles Parkinson