How Latrobe Valley could lead energy revolution
Hundreds of millions of dollars will be targeted at new energy technologies such as clean coal and hydrogen as Scott Morrison moves to strip back subsidies for solar and wind power.
The Latrobe Valley could be at the front of the energy revolution, nominated as the potential home of a new carbon capture and storage trial and a hydrogen export hub.
The Prime Minister will on Thursday lock in $1.6bn for the Australian Renewable Energy Agency to invest over the next decade, via grants for projects worth up to $50m.
He will also enable ARENA to invest in any emerging energy technologies, scrapping existing rules which confine investment to clean and renewable sources.
"Australia is in the midst of a world-leading boom in renewable energy with over $30bn invested since 2017. Solar panels and wind farms are now clearly commercially viable and have graduated from the need for government subsidies - and the market has stepped up to invest," Mr Morrison said.
"The government will now focus on the next challenge: unlocking new technologies to help drive down costs, create jobs, improve reliability and reduce emissions."
ARENA will receive $1.4bn to spend on projects of its choosing, having backed more than 540 projects with nearly $1.6bn since 2012, creating thousands of jobs.
Next month's federal budget will also include $193m for a series of targeted programs to be run by ARENA, including for carbon capture and storage pilot programs to trap carbon dioxide - such as from coal-fired power stations - and store it underground. The Victorian government has nominated Bass Strait, offshore from the Latrobe Valley, as a "world-class opportunity" for the technology.
The region is also in the mix to host a $70m hydrogen export hub. Other specific projects include $95m for energy technologies used by agricultural, manufacturing and transport businesses, and a $74m future fuels fund to support hydrogen, electric and bio-fuelled vehicles.
Energy Minister Angus Taylor said the government wanted to "get the balance right" on energy investments.
"We will reduce the cost of new and emerging technologies, not raise the cost of existing technologies or layer in new costs to consumers and businesses through mandated targets or subsidies," Mr Taylor said.
The decision to bankroll carbon capture and storage through ARENA will ignite a political fight with Labor.
In June, Opposition Leader Anthony Albanese offered to work with the government on a bipartisan energy policy, but he said that while Labor was willing to support carbon capture and storage, any deal was contingent on funding not being diverted from renewables.
Mr Morrison's announcement follows his plan for a "gas-fired recovery", with a major intervention in the market that could include taxpayer support for new pipelines and even a new gas-fired power station in New South Wales.
Originally published as How Latrobe Valley could lead energy revolution