The Federal Government has released its first Low Emissions Technology Statement, following on from the announcement of its Technology Investment Roadmap.
The statement outlines five priority technologies and economic stretch goals to make new technologies as cost-effective as existing technologies. These are:
- Hydrogen production under $2 per kilogram
- Long duration energy storage (6-8 hours or more) dispatched at less than $100 per MWh – this will enable reliable, firmed wind and solar at prices around the average wholesale electricity price of today
- Low carbon materials – low emissions steel production under $900 per tonne, low emissions aluminium under $2,700 per tonne
- CCS – CO₂ compression, hub transport and storage under $20 per tonne of CO₂
- Soil carbon measurement under $3 per hectare per year – a 90 per cent reduction from today’s measurement costs and would transform the economics of soil carbon projects for Australian farmers
The government will now commence eleven key actions:
- Establishing a Technology Investment Framework to prioritise the government’s investments in new technologies
- Investing $1.9 billion in a new energy technology package; establishing Australia’s first regional hydrogen export hub, a King Review Co-Investment Fund, a CCS Deployment Fund and a Future Fuels Fund to support new and emerging technologies
- Finalising new or revised Emissions Reduction Fund methods to support CCS and soil carbon within 12 months
- Commencing a soil carbon innovation challenge to rapidly reduce the cost of measuring the impact of new farming practices on soil carbon sequestration
- Introducing legislative reforms to the Australian Renewable Energy Agency (ARENA) and the Clean Energy Finance Corporation (CEFC) to give their boards flexibility to respond to the government’s priorities
- Requiring key agencies (ARENA, CEFC and the Clean Energy Regulator) to focus on accelerating the priority technologies
- Directing key agencies to publicly report on what action they are taking to accelerate the priority technologies
- Establishing a permanent Technology Investment Advisory Council, including the Chairs of key agencies, to advise on the development of the second Annual Statement. Annual Statements are the mechanism the Government will use to guide, track and measure the impact of its investments in new energy technologies
- Expanding Australia’s international collaboration with trading partners
- Conducting a review of legislative or regulatory barriers to technology uptake as part of the second annual Low Emissions Technology Statement
- Completing the development of Australia’s Long Term Emissions Reduction Strategy before COP26
Federal Minister for Energy and Emissions Reduction, Angus Taylor, said, “The government’s plan has three key focuses – lower emissions, lower costs and more jobs.
“Getting the technologies of the future right will support 130,000 jobs by 2030, and avoid in the order of 250 million tonnes of emissions in Australia by 2040.
“If these technologies achieve widespread deployment globally, they will significantly reduce emissions from energy, transport, agriculture and heavy industry.
“These sectors account for 90 per cent of global emissions and emit 45 billion tonnes each year.
“The government expects to invest more than $18 billion in low emissions technologies over the decade to 2030, in order to drive at least $50 billion of new investment over the next ten years.”
Energy Networks Australia (ENA) CEO, Andrew Dillon, welcomed the recognition of hydrogen and batteries as key parts of the clean energy transition in the Technology Roadmap.
“This is not about one technology or another, it’s about the right mix to achieve our goals of clean, reliable and affordable energy for Australia,” Mr Dillon said.
“Household, distribution and transmission level batteries will play their part along with renewable gases like hydrogen.
“To maximise the value we get from batteries, we need to also improve pricing signals to encourage smart technologies such as household batteries and electric vehicles to charge and discharge when it’s best for everyone.
“Examples of this are already in practice by SA Power Networks, Western Power and Horizon Power.”
Mr Dillon said the goal of producing hydrogen for $2 per kg should also be coupled with targets for blending hydrogen in our distribution networks.
“Our customers prefer using gas for cooking and heating, but they want to see emissions reductions,” Mr Dillon said.
“Networks like those owned by AGIG, Jemena and ATCO are already trialling the blending of hydrogen for use in homes and businesses.
“The development of a domestic hydrogen market is an essential step towards getting the price of production down and supporting a viable export market.”
Clean Energy Council Chief Executive, Kane Thornton, said the prioritisation of clean hydrogen, energy storage and green steel were promising, but there was a missed opportunity not to prioritise the increased and better use of Australia’s wind and solar resources.
“While wind and solar are now proven technologies and attracting enormous investor support, they are also the technologies that can have the greatest impact in decarbonising Australia’s energy system and economy,” Mr Thornton said.
“It is therefore surprising and disappointing that the roadmap fails to address the range of barriers to their accelerated deployment.”
Mr Thornton said the initiative was also a missed opportunity to support offshore wind and an accelerated rollout of public electric vehicle (EV) charging infrastructure that can boost Australian jobs and local economic activity.
“Offshore wind is an enormous emerging opportunity for Australia, and has been a strong focus for many other countries around the world,” Mr Thornton said.
“It is at an earlier stage of development and as such still faces a range of barriers and challenges, particularly relating to the regulatory and approvals regimes that warrant it to be a priority.
“This technology roadmap is no substitute for a comprehensive energy transition strategy, including target and policy, to lead the shift to clean energy.”
The Australian Energy Council (AEC) Chief Executive, Sarah McNamara, said, “It is important to find the best means to reduce emissions at the lowest cost to households and across the economy.”
“This roadmap recognises that need to decarbonise across all parts of the economy. Importantly, it goes beyond electricity to consider the potential for technology to reduce emissions from the other two-thirds of Australia’s emissions.
“We welcome its commitment to support funding for innovation and to encourage private sector investment as well as its prioritisation of key areas.
“It’s important funding is reserved for genuine innovation and to help establish early-stage clean technologies rather than subsidise already commercial or mature technologies.
“For that reason, changes to the remit of the Clean Energy Finance Corporation and ARENA is a pragmatic use of taxpayer funds.”
Ms McNamara noted that falling solar prices were a prime example of technological advancements changing the approach to achieving lower emissions.
“Equally, many technologies that show early promise, such as geothermal, can just as quickly fail to progress,” Ms McNamara said.
“This underlines the need for careful consideration of the most efficient technologies, which is a strength of the approach outlined.”
The announcement is backed by a comprehensive Technology Investment Framework that aims to leverage a three to five times level of co-investment from the private sector and other levels of government.
The first statement was prepared with advice from a panel of industry leaders, investors and researchers chaired by Australia’s Chief Scientist, Dr Alan Finkel, and including Alison Watkins, Ben Wilson, Drew Clarke, Grant King, Jo Evans and Shemara Wikramanayake.
The panel’s work was also informed by extensive stakeholder consultation – including around 500 written responses and workshops with more than 150 businesses, researchers, community organisations and associations.
Mr Taylor thanked the panel for its contribution to the Technology Investment Roadmap.
The Low Emissions Technology Statement is available here.