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ARENA and CEFC support solutions for certainty of energy supply, including flexible capacity and large scale energy storage

1 February 2016

The Clean Energy Finance Corporation (CEFC) and Australian Renewable Energy Agency (ARENA) have welcomed the opportunity to work together to accelerate the development of flexible capacity and large-scale storage projects that enable certainty of energy supply and smooth integration of renewable energy sources.

Prime Minister Malcolm Turnbull today called on both organisations to focus on encouraging the development of flexible capacity and large-scale storage projects in Australia as it transitions to low emissions technologies.

ARENA CEO Ivor Frischknecht said ARENA would call for Expressions of Interest for demonstration projects under its Advancing Renewables Program (ARP). It is expected that ARENA would allocate at least $20 million to the successful projects.

Eligible projects are those which provide flexible capacity to the system such as battery storage, pumped hydro, concentrated solar thermal, biomass and demand management technology.

CEFC CEO Oliver Yates said the CEFC would provide successful ARENA funding recipients with the opportunity to secure long-term debt finance to support their projects. The CEFC was also open to considering finance solutions for other projects not seeking ARENA funding. CEFC finance would be provided along similar terms to its $250 million commitment to accelerate large-scale solar

Mr Frischknecht said: "As ARENA and the CEFC work to accelerate Australia's shift to an affordable and reliable renewable energy future, we know that the energy sector and the whole economy face a range of challenges in ensuring it is an orderly transition."
"Developing large-scale flexible capacity projects, such as grid scale batteries and pumped hydro, will be a crucial part of the solution."

Mr Yates said: "The cost of generating energy from wind and solar has come down fast and is continuing to decline. If we are to maximise Australia's strategic national competitive advantage in clean energy, we need to complement this with energy storage and grid stability services.
"Working together, ARENA and the CEFC are looking forward to helping accelerate the development of flexible capacity projects that will further strengthen our electricity grid, delivering lower emissions and lower costs."

"Australia is a lucky country. We are blessed with diverse renewable energy resources across the nation that can produce power at different times. Electricity is easy and fast to move from one place to another with appropriate grid infrastructure. When we complement renewable generation with the addition of energy storage and grid support, we can develop an electricity supply that is cost-effective, reliable, clean and secure."

Mr Frischknecht said ARENA and the CEFC were already discussing flexible capacity projects with several potential proponents.

In addition, ARENA has funded a number of projects featuring large-scale storage elements, such as:

  • The AGL Virtual Power Plant (which will aggregate 1,000 household batteries in Adelaide to provide grid support);
  • Lakeland Solar Farm and Kennedy Energy Park (which combine battery storage with solar and/or wind generation);
  • The Kidston Pumped Hydro Storage Feasibility Study; and 
  • A national off-river pumped hydro resource mapping study being led by Professor Andrew Blakers at the ANU.

"The decision to place greater focus on supporting storage and other flexible capacity projects builds on this existing work," he said.

ARENA and the CEFC agree that demonstration projects provide knowledge and momentum, which will then allow the two organisations to develop a framework for a flexible capacity or large-scale storage funding round.

"The intention, as is always the case with ARENA and the CEFC, is to accelerate a technology's path to commerciality as quickly as possible and then step away," said Mr Frischknecht.

Last year the agencies worked together on the highly successful Large Scale Solar Competitive Round, which will result in 12 new solar plants being constructed across the country. That joint program has seen costs fall to the point that Australian large scale solar PV technology is now cost competitive with other generation technologies.

ARENA project proposals will be assessed under the existing ARP assessment framework. Proponents can contact ARENA via email at


ARENA was established by the Australian Government to make renewable energy technologies more affordable and increase the supply of renewable energy in Australia. Through the provision of funding coupled with deep commercial and technical expertise, ARENA invests in renewable energy projects across the innovation chain and is committed to sharing knowledge and lessons learned from its portfolio of projects and information about renewable energy. ARENA to date has committed $1.1 billion in funding to more than 270 projects. For more information, visit


Media release, 2017

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