The Australian Renewable Energy Agency board is believed to have proposed a compromise on its funding position, in a bid to continue its support of critical research and early stage renewable energy and battery storage development.
The Coalition government is seeking to strip $1 billion in funds from ARENA, which was created by Labor in 2012, but the conservatives need the support of parliament, and Labor in particular, to pass legislation to do that.
ARENA currently has $1.3 billion in legislated funding and would be left with just $300 million or so after the current $100 million funding round for large-scale solar, the results of which will be announced tomorrow.
Current and former board members are apparently lobbying the Coalition government to abandon proposed cuts to the Agency’s $1.3 billion budget, but in an attempt at compromise are suggesting that the scale of the funding cuts could be reduced.
They have outlined several scenarios where the cuts are reduced to $300 million or $500 million, and what that would mean for new projects, investments and jobs (remember the jobs and growth mantra).
It has also been suggested that ARENA funding could come from the so-called “penalty” prices that will be paid if large energy retailers fail to meet their obligations under the renewable energy target.
Currently, there is no penalty imposed on retailers if they fail to build or contract enough renewable energy to meet their obligations. The “penalty price” is paid by the consumer, and the money passed through to government coffers.
Some in the industry have suggested that these funds could be used to support institutions such as ARENA, although it could also mean that such funding becomes dependent on the RET targets being missed. It is not known if this has been discussed between ARENA and the government.
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