Energy Insiders Podcast: ARENA’s Innovation Strategy with Darren Miller

Solar Sunshot Program and Cost Reduction Goals

Solar Sunshot Program Launch:

  • First Award: $46 million to 5B for solar manufacturing capacity expansion
  • Total Funding: $1 billion program administered by ARENA
  • Purpose: Move Australian solar innovation up the value chain, maintain local innovative companies, and provide supply chain resilience
  • 5B Partnership: Signed 100 megawatt deal with Zenith for deployment at mining facilities using 5B Maverick technology

30-30-30 Ultra-Low-Cost Solar Strategy:

  • Target 1: 30 cents per watt installation cost (down from current ~$1/watt)
  • Target 2: 30% module efficiency by 2030
  • Target 3: Levelized cost of energy at $20/MWh (down from current $50-60/MWh)
  • Current Status: Modules represent only 20-30% of total installation costs; majority is labor, civil works, and electrical work

Robotics and Automation in Solar Installation

Current Capabilities:

  • Automated Piling: Robots can autonomously move around solar fields carrying piles with minimal human guidance
  • Labor Reduction: Potential to reduce from 3 people driving machinery to 1 person with remote control
  • Next Phase: Module attachment to mounting systems (more challenging due to small nuts and bolts)

Future Vision:

  • Factory-in-Field Methodology: Mini factories set up at solar sites with modules and steel coming in
  • Automated Production Line: Rolling torque tubes in field, automated module attachment, autonomous vehicle transport
  • Global Response: $100 million global solar challenge received 117 expressions of interest from 17 countries

ARENA’s Investment Portfolio and Strategy

Financial Scale:

  • Total Commitments: $3 billion committed to 780+ projects over 13 years
  • Future Capacity: $10 billion available for future investments
  • Annual Approvals: Increased from $200-300 million annually to over $800 million this financial year
  • Specific Programs: Hydrogen Head Start ($2 billion), Solar Sunshot ($1 billion), Battery Breakthrough Initiative

Supply Chain Focus Areas:

  1. Mining Decarbonization:
    • Diesel replacement in mines
    • Electrification of mining equipment
    • Projects with major mining companies
  2. Metals Processing:
    • Low emissions metals portfolio focusing on alumina/aluminum supply chain
    • Green iron opportunity using hydrogen for direct reduced iron (DRI) processes
    • Critical minerals onshore processing
    • Project with Rio and Sumitomo at Yarwun refinery (hydrogen)
    • Calix project for hydrogen-based iron reduction
  3. Industrial Heat Decarbonization:
    • Industry uses 40% of Australia’s energy, 50% for process heat
    • Focus on transitioning from gas to electrification
    • Mechanical vapor recompression project with South32 at West Australian alumina refinery
  4. Transport Electrification:
    • Heavy vehicle electrification programs (not hydrogen-focused)
    • Charging infrastructure and managed charging technologies
    • Working with disaggregated truck owners through aggregators
  5. Consumer Integration:
    • Demand flexibility and distributed energy resources
    • Industry standards, cybersecurity, and interoperability
    • Vehicle-to-grid coordination through bi-directional roadmap

Grid Technology Development

Grid-Forming Inverters:

  • Investment: $176 million across 8 battery projects
  • Progress: 5 of 8 reached financial close, only 1 currently operating
  • Impact: Grid-forming has become default position for new projects
  • Outstanding Question: Whether digital technology can replace synchronous condensers and kinetic equipment for grid stability

Vehicle-to-Grid:

  • Commissioned bi-directional roadmap published recently
  • Need for coordinated approach across states and networks
  • Australia needs to present as one market, not 16 separate markets
  • Potential for significant positive or negative grid impact depending on coordination

Green Hydrogen Program

Hydrogen Head Start:

  • Round 1: $2 billion funding
  • Round 2: Additional $2 billion planned
  • First Project: Murchison Green Hydrogen Hub (1.5 gigawatt electrolyzer near Geraldton, WA)
  • International Perspective: Visited Saudi Arabia’s NEOM project (2.2 gigawatt electrolyzer, 70% complete)

Key Strategic Opinions

Darren Miller’s Technology Priorities

Solar Cost Reduction Confidence:

  • Expressed increased confidence in achieving 30-30-30 targets based on 12 months of industry collaboration
  • Believes robotics and automation crucial for Australian conditions (hot, remote areas)
  • Views lower interest rates as supportive for LCOE improvements through better financing

Industry Development Philosophy:

  • Emphasizes need for sophisticated, aligned applications matching investment priorities
  • Supports startup journey through difficult innovation cycles
  • Goal is for companies to eventually not need ARENA funding due to commercial success

Supply Chain Integration:

  • Advocates for full spectrum approach from mining to consumer
  • Believes extremely low-cost electricity essential for green hydrogen viability
  • Sees iron ore reduction process as “very big prize” worth 1.5 billion tonnes of scope 3 emissions

Technology Realism

Hydrogen Market Assessment:

  • Acknowledges hydrogen challenges largely due to electricity costs
  • Realistic about hydrogen representing 10-15% of decarbonization challenge (not 50%)
  • Emphasizes need for patience given complexity and high risk of large projects

Labor and Automation Balance:

  • Recognizes need to use expensive remote labor “judiciously for the right things”
  • Open to union involvement in robot operation
  • Balances job creation with cost reduction imperatives

Political and Market Stability:

  • Values continuity and certainty for industry development
  • Sees current political stability as opportunity to “band together to deliver on ambition”
  • Focuses on execution rather than policy development phase

The conversation reveals ARENA’s comprehensive approach to energy transition, spanning from resource extraction through to consumer applications, with particular emphasis on cost reduction, automation, and maintaining Australia’s competitive position in global clean technology markets.