Press conference with RayGen CEO Richard Payne and ARENA CEO Darren Miller - Carwarp, Victoria

RICHARD PAYNE, CHIEF EXECUTIVE OF RAYGEN: Thank you everyone for joining us today, thank you Senator McAllister for coming and officially opening RayGen's Solar Power Plant here in Carwarp near Mildura. This technology is highly innovative, Australian-developed and owned, and it is now exporting to the grid, a flagship project where all elements have now met specification, and it's backed then by some very important strategic investors into RayGen, as well as a fabulous amount of support from ARENA and the Federal Government. And that's also part of today is also discussing how we have developed this amazing module technology, and we're commissioning Australia's largest solar module manufacturing facility in Melbourne.

SENATOR JENNY MCALLISTER, ASSISTANT MINISTER FOR CLIMATE CHANGE & ENERGY: Thanks, Richard, my name's Jenny McAllister. I'm the Assistant Minister for Climate Change and Energy. It's a real pleasure to be here with the team from RayGen, their key partners, including of course the Australian Government agency ARENA. This project is a real Australian innovation story, conceived of by an Australian researcher, funded in partnership with the Australian Government, and developed through perseverance over a 10 year period to bring us to the point we're at today.

The International Energy Agency tells us that we've got a long journey to travel on together to 2050. Out to 2030, most of the technologies we will require to keep decarbonising technologies that we already have. But beyond that, at least half of the technology that we require is in prototype or under development. It's why organisations like ARENA really matter, partnering with Australian innovators and Australian firms to bring about real innovation in energy technology at commercial scale. And that's what this project represents, a 10 year partnership between ARENA and this company.

ARENA is a Labor creation, and we're proud of it, and we'll always defend it. We defended it against the Liberals when they tried to abolish it. We defended it when they tried to defund it, and we defended it when they tried to reorient it, away from its core purpose, supporting the development of innovative renewable technology.

As we step through these processes and this journey, it is important that we continue to observe the importance of innovation in the Australian economy, because it's good for local communities like this one, it's good for our national electricity system, and frankly, it's necessary for the globe.

So today I'm proud to be opening this plant. I'm also proud to announce the next phase of our contribution, a $10 million contribution to help RayGen work through the issues necessary to scale up manufacturing, so that the inputs to plants like these can be produced right here in Australia.

It's been a long journey; it's taken perseverance and determination. I congratulate everyone involved, and I'm really pleased to be here. Darren, I wonder if you wanted to say a few words.

DARREN MILLER, CHIEF EXECUTIVE OF ARENA: Thank you, Minister. It's terrific to be here today and thank you very much to the RayGen team for working so collaboratively with us over such a long time. As you've heard, ARENA has supported RayGen with now the sixth grant of $38 million in total over a 10 year journey. As long as ARENA has been around supporting over the 660 projects that we have funded throughout Australia, RayGen has been part of that journey with us to date, and the technology is so important. We know that we need firm dispatchable energy, we know that the grid needs it as we decarbonise, and this technology is a really crucial element in the electricity system to have both cheap generation as well as the storage that we need and to dispatch it out to the grid when the sun and the wind aren't available.

We've had fantastic support from the Assistant Minister and the Minister. We thank the Government for their support, and we look forward to a really fruitful relationship with this company and many others, as we go ahead on this journey towards 2050 and the net zero target that we have. Thank you.

JOURNALIST: Darren, can I just ask you a question, you talked about $38 million over six rounds now. There's been a fair few iterations of this technology. Did you ever worry at any point that you'd backed the wrong horse?

MILLER: Well, you have to back many horses. We don't know what the solutions are. We have to invest in researchers like John Lasich who started this technology back in 2010. You have to persevere, you know, companies really struggle to raise capital, there is this real valley of death, where funds aren't available, and I think the job of government and the agency that I lead, ARENA, to walk in hand with these companies on that very difficult journey. We've never looked back, we've always encouraged, and we've been really encouraged and amazed at the innovation that we've seen along the way as this technology has adapted from being primarily a solar PV idea in the beginning, to be now a dispatchable renewable technology as it is today.

JOURNALIST: Minister, I wonder if you could comment on the fairly urgent wake up call from AEMO overnight and also on the Snowy Hydro. Is the government really doing everything it could to, you know, boot up the transition and overcome some of the road blocks that we're seeing?

MCALLISTER: Thanks, Ben. So, we welcome the report from AEMO today. AEMO plays a very important role as the market operator in describing on a regular basis the investment requirements and the opportunities for investment in our National Electricity Market.

Today's report tells us something we've actually known for a long time, that more investment is required to replace the ageing fleet of thermal generators. So as coal fired power stations come to the end of their life, they are going to retire, and they also are going to operate in a less stable and predictable way, and it's why new investment is needed.

This is an area that was sorely neglected and mishandled by the previous government. For 10 years, that government failed to land an energy policy, and the consequence has been a less than orderly approach to the transition. We are now at a phase where we can turn that around, and we are working urgently every day to put in place the policies that are necessary to make this transition occur.

Yesterday, when I was with Minister Bowen, and he announced the next round of the Capacity Investment Scheme, something that the previous government talked about, but was never able to land. We need to provide the investment certainty that is necessary to allow these ageing assets to be replaced, and we know that working collaboratively with states and territories, not picking fights with them, we are going to be able to put in place the necessary policy architecture for this ambitious but achievable transition.

In relation to Snowy, my colleague, Minister Bowen, has stood up just in the last hour, I understand, and made a series of remarks as the shareholder minister. Perhaps I can just say this - this project was running behind time prior to the last election. That was known to the Minister at that time, Mr Taylor, and he chose not to be transparent with the Australian community about that fact. This was something we discovered upon coming to government, and we communicated it, as we should have, to the Australian people.

Today's release of new information and a new project update from the Snowy leadership reflects the same approach; transparency in the way this challenging but important project is progressing. Now, Minister Bowen, I think, has indicated today that the government will take the time to work through the implications of the report that we've received from Snowy. But importantly, in the interest of transparency, he's providing an update to the community in the announcements and the information provided today.

JOURNALIST: How is it that at that Federal Government owned company can get to the stage where it spends $4.3 billion and only just then realise that it's actually going to blow its budget of just over $5 billion, and actually will double the costings? Isn't this a complete failure of corporate governance, and wouldn't some remedial action be taken against the company itself?

JENNY MCALLISTER: Are you speaking about Snowy?

JOURNALIST: M'mm.

MCALLISTER: If you think about the sequence of events, we came to government, we received information from the Snowy management about delays to that project, and we communicated it to the public. There has since been a change in the executive leadership of Snowy Hydro, and Minister Bowen asked Snowy Hydro to undertake a project review. That review has now been provided to the Shareholder Ministers, and Minister Bowen and Minister Gallagher made it clear that they're going to work through the implications of the report.

JOURNALIST: Is it a failure of governance?

MCALLISTER: We asked for a project update, they have provided it, and I know that Minister Gallagher and Minister Bowen will be working through that in a careful way.

JOURNALIST: Can I ask Richard a question about the next slate of projects that you're going to be studying under this grant from or with the help of this grant from ARENA. You talk about 200 megawatts, I think, 150, and 1.2 gigawatt hours. AGL, I think, I understand are about 50, Liddell. So can you describe what the 200, the sort of total scope of what you described in the earlier release covers?

PAYNE: So that's a project in South Australia, near Cleve. So we've secured the land there and undertaken development approval process, and we're also undertaking, with the support of ARENA, the front end engineering design for that project, and we're looking to reach financial close on that project in the next 12 months. And that's really scaling out the technology that you can see behind me, it’s about replicating this and deploying much greater volume, so each field you see here is a megawatt, and we have 200 of those fields to be deployed, and we take of the advantage of the economies of scale on the storage side.

So in this technology we use an organic Rankine cycle turbine to create renewable, dispatchable electricity to the grid, and that technology scales out very economically to a 30 megawatt turbine, and then we just replicate these systems, and that's with significant support from ARENA also to automate the mirrors, or the heliostats that you can see behind me, we'll be then increasing volume throughput of these heliostats to those projects.

JOURNALIST: The manufacturing line that you talked about, that sounds interesting; you described it as the biggest manufacturing line for solar in Australia. So what's that actually manufacturing, and how big can it actually get to? I think you talked   mentioned gigawatt scale?

PAYNE: Absolutely. So I guess this is the core technology that RayGen has developed that I'm holding in my hand. It's a module --   

JOURNALIST: It's those things up there.

PAYNE: -- it's a module that sits at the top of the tower, and it contains unique multi junction cells that are used in the satellite industry, and they operate at 1,000 times the concentration of a single sun. So what I'm holding in my hand can produce 2.5 kilowatts of electricity, and 5 kilowatts of thermal energy in the form of hot water. And this is used to turbocharge the efficiency of our storage system. This module is in a clean room in Hawthorn East, 170 megawatts per annum, and it's a very small footprint and it's very capital light. And so we are looking, together with our strategic investors, ARENA, to how we can further scale that module manufacturing out to deploy to a growing pipeline, not only in Australia, but also international opportunities.

JOURNALIST: Darren, how important is that for your goal of ultra-low cost solar in manufacturing in Australia, because those are twin goals, I think, for ARENA?

MILLER: Yes. I think the thing to realise is that this is quite a different technology to the solar PV that we're putting out on rooftops in the field. This is a very specialised piece of equipment. As Richard said, it's using technology in the space industry. This module is already operating at 38 per cent efficiency. So the efficiency targets that we've set at ARENA of 30/30/30, that's 30 per cent efficiency target, is specifically towards that mass produced traditional solar PV. But this gives us confidence that actually the technology, fundamental technology of converting sunlight into electricity can push up that efficiency range and give us ultimately that ultra-low cost solar output that we're aiming for by 2030, so that in the 2030s and beyond, we can just focus on installing at huge scale this amazing technology that's been invented and deployed and proven in Australia.

JOURNALIST: And Richard, this plant in Melbourne that you're talking about building over the next 12 months, I think you said, what's the budget for that, and what would it require to get to the gigawatt scale and what sort of partners have you got in that venture?

PAYNE: Yeah, so specifically the module manufacturing along the 170 megawatt line, that cost about $7 million Australian, which is actually very low compared to traditional PV, because simply the size of this model is very small per megawatt. So, and the actual specific project, we're still working through the cost of that, but it looks competitive with PV on the generation side, and then outcompete pumped hydro from the storage perspective.

In terms of scaling this module manufacturing we are looking at a circa $30 million to produce a gigawatt module manufacturing line, and we're doing that with partners, strategic investors that have come behind RayGen including SLB (formerly Schlumberger) AGL, Equinor, Chevron and Photon Energy.

JOURNALIST: And those figures you gave don't include the cost of the land, they're just the plant and equipment going to the line?

PAYNE: That's specific to the module manufacturing line, yeah.

JOURNALIST: Just got a question for the Assistant Minister. This has created something like 70 jobs in construction, but only four are ongoing, is there, I guess, a plan to sort of had projects like this that require more local recruitment and jobs?

MCALLISTER: Thanks very much for the question. Renewable energy in regional areas presents really significant opportunities for economic development. As you observed, that includes, of course, the jobs that arise when we construct new facilities, but it also arises from the economic activity that can be enabled when we have significant capacity to generate electricity in a local area, and we've seen the impact of that over, you know, a century, under previous technologies, those same opportunities present potentially for regional areas.

One of the other things, of course, in an agricultural area is that over time the capacity to improve the energy performance of agricultural activity and farming activity does present real opportunities for our agricultural sector, it's a highly innovative sector, and we know that there are plenty of farmers who are interested in the energy performance in refrigerated areas, the energy performance of their farm machinery, the opportunities to combine generation with farming activity; there are significant potential benefits for regional communities.

One of the things our Government is interested in is making sure that as we move through this transition and this transformation of our energy system, that we do collaborate with regional communities to ensure that there are benefits seen and felt here in communities like this.

JOURNALIST: One for Darren. And I'm sorry, it's not to do with this project, but an approach, I think you had a previous interest in a previous career interval, AEMO was   one of the comments they made in the ESOO overnight is that customer-owned assets, energy resources are not orchestrated at anything like the rate that they had hoped for now, and they therefore downgraded their assumptions about it. Is that something, from your own background in that area, is it something that's just going to take a little longer to sort of crystallise, or is it something that ARENA is involved in, I think, in quite a few projects --   

MILLER: Thanks for the question.

JOURNALIST: -- and so on?

MILLER: So I think the orchestration of subsidiary resources is really important. It's a problem that the industry is still working on. ARENA is supporting that through many initiatives, not the least of which is the distributed energy integration program or DEIP, as we call it, which is a collaboration of about 13 industry bodies and central bodies that are collectively looking at these issues of digitisation, cyber, interoperability, the ability to then integrate that into various new network tariffs. It's a live challenge, and it's something that we need to continue working on, particularly if we have the vision, which we do, of increasing the rooftop solar share beyond the 20 to 25 gigawatts we've got today, pushing into that higher 70, 80, 90, gigawatts that is in the ISB. The APVI has forecast that we could actually put 179 gigawatts on our rooftops in Australia, and that vision will only happen if we can sort out our distribution networks, and the way that these assets interact with each other. It's a journey we're still on, we need to work hard at it, but I'm sure we can solve it, as we've solved many problems over time.

JOURNALIST: One for the Assistant Minister again, please. There's a big pipeline of investment in new renewable projects. Can I ask why so few of them are reaching the final investment decision?

MCALLISTER: We've been through a genuinely challenging economic period globally after the pandemic. We've had very difficult issues in relation to supply chains, we have had a war in Ukraine, and we've had significant inflation globally, and all of those things I think have meant that investment, the investment environment has some challenges.

But the fundamentals are all there. We have a government that is determined to make the policy settings such that investment can proceed in a certain way, and we saw some of that yesterday with the announcement of the next tranche of the Capacity Investment Scheme. We've got an investment community that I do believe is interested and ready to go. And we have for the first time in a long time a government determined to work with our state and territory partners to modernise and upgrade the settings around them in itself. All of that work is important. All of that work should have been done under the last government. But instead, they were unable to resolve their internal disputes about how energy policy ought to be organised, and it has left the market in a very difficult situation. We have been working every day since coming to government to resolve those issues, and as Minister Bowen so frequently says, this goal is ambitious, but achievable, and we are determined to make it happen.

JOURNALIST: Everyone agrees that Australia needs to be moving away from fossil fuels. Is there a risk we're trying to move away too quickly? Can you guarantee we'll keep the lights on in Australia till 2030?

MCALLISTER: As I've indicated, we are working every day to establish a stable transition. This is work that could have been done by the previous government and that they failed to do. But we know that by taking a collaborative approach with states and territories, by working with industry partners, by making the necessary investments in innovative technology, by upgrading the regulatory environment in which the market operates, we can do this. And I think you'll see in our government a constructive, determined approach to a genuine challenge, and we're looking forward to doing the work.