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					Department of Innovation, Industry, Science and Research submission to the Australian
Centre for Renewable Energy (ACRE) strategic directions consultation paper


The Department of Innovation, Industry, Science and Research is responsible for a range of
programs and policies that promote the development, commercialisation and deployment of new
and enabling technologies, products and services. These are aimed at improving the
competitiveness of Australian businesses and organisations and provide a vehicle for stronger
long term strategic engagement and support for Australian businesses.

The renewable energy and related sectors can benefit from these programs and policies. They
can also help strengthen ACRE’s strategic intent and governance by providing a whole of
government context to ACRE’s activities through utilising complementary programs.

The consultation draft “Strategic Directions for the Australian Centre for Renewable Energy”,
released on 7 December 2010, acknowledges the potential for Australian intellectual property to
address Australia's need for sustainable energy. Among the key issues raised in the consultation
and discussion papers are the opportunities for Australia to gain from investment in renewable
energy technologies and supporting industry to build its capacity to develop renewable energy
and enabling technologies.

However, there is no explicit statement about means of achieving the transfer of technology to
Australian organisations and businesses or encouragement of Australian based innovation and

There is already considerable capability in sustainable energy in Australia. Companies such as
Hofmann Engineering are heavily engaged in global supply chains for sustainable wind and
ocean energy. Furthermore, the intellectual property generated through the work of the CSIRO
and Dyesol in non-silicon solar energy, and BioPower Systems, Carnegie and Oceanlinx in
ocean energy amongst other examples would also be a good fit to ACRE's longer-term projects. 
Active engagement with such organisations will ensure Australia gained the maximum benefit
from ACRE's activities.

The Future Manufacturing Industry Innovation Council has identified manufacturing in support
of sustainable/renewable energy as an opportunity for Australian businesses.

In regard to the challenges faced by ACRE in the design of the Emerging Renewables program,
it is recommended that consideration be given to using the services offered by AusIndustry, the
Australian Government's business program delivery division in the Department of Innovation,
Industry, Science and Research.

The Department of Innovation, Industry, Science and Research’s industry development programs
and policies provide ACRE and Australia’s renewable energy sector with a vehicle to seek to
maximise the benefits to Australia from ACRE’s work. They provide a basis to build a strong
role for Australian manufacturing (both in equipment supply and maintenance) and in our
knowledge based industries.

It is key Government policy that Australian innovation be supported and that we ensure that the
benefits of progress and prosperity are distributed throughout the economy. The Department of
Innovation, Industry, Science and Research would be very interested in pursuing these joint
interests with ACRE.

Department of Innovation, Industry, Science and Research activities

Powering Ideas: an Innovation Agenda for the 21st Century, Australia’s innovation agenda, was
released on 12 May 2009. Powering Ideas takes a holistic approach to developing a 10-year
vision for the national innovation system to boost Australia’s innovation system, as well as new
proposals to improve innovation within the research, business and public sectors including
reforms to the governance of the system. It sets innovation priorities and strengthens
coordination to improve skills and expand research capacity, to increase incentives for
innovation in business, government and the community sector, and to boost domestic and
international collaboration.

The Department of Innovation is responsible for a number of innovation programs which provide
funding support, build skills and increase capacity for businesses to innovate. These include the
R&D Tax Concession, the Innovation Investment Fund, Cooperative Research Centres (CRC)
Program, Commercialisation Australia, and Climate Ready. Some of these programs, though not
specifically targeting renewable energy, have included projects that support R&D, proof of
concept and early stage commercialisation of renewable energy (for example some projects
under the Climate Ready Program).

The Department of Innovation is experienced in designing these programs, has a highly effective
delivery system through AusIndustry and the Innovation Australia Board, and encourages ACRE
to consider how best to leverage off this well-established infrastructure to strengthen linkages
and maximise outcomes across the innovation system.

The Department of Innovation participated in ACRE’s recent consultation process on
development of the Renewable Energy Venture Capital Fund and provided considerable detail on
policy development of venture capital funds gained through experience in administering the
Innovation Investment Fund.

It is important that the government provides a supportive business environment to underpin the
competitiveness and performance of Australian firms. This is not about selectively ‘picking
winners’ but where government looks to create conditions for business to succeed.

This requires the removal of barriers that may preclude Australian firms pursuing new
commercial opportunities both domestically and abroad. By identifying and addressing these
market failures the Government can accelerate the development of advanced capabilities and
strengthen the international competitiveness of Australian firms.

Government procurement can provide substantial opportunities for local industry. In addition to
winning government work, opportunities arise for domestic industry development through the
creation of new capabilities and support of skilled employment. Major public projects can also
provide industry development opportunities for Australian goods and services producers,
opportunities to access new technologies, business and manufacturing practices to compete both
in Australia and internationally.

Ready access to competitive and reliable value chains for goods and services is vital to attracting
investment and ensuring that projects are globally competitive and contribute to economic
growth and prosperity.

Renewable energy projects are a particular case in point. It is clear that Australia can gain from
investment in renewable energy technologies. It is important that Australian industry is
encouraged to build its capacity to develop renewable energy and enabling technologies.
Utilising government procurement opportunities for capability building, the Australian Industry
Participation (AIP) National Framework focuses on industry development. It encourages
opportunities for Australian businesses to build capabilities, participate in technology transfer,
form alliances with leading overseas companies, provides a mechanism for international project
leaders to be made aware of competitive Australian expertise and for these to be incorporated
into projects, in a commercial way.

Commercialisation Australia

The Australian Government has established Commercialisation Australia to support the
commercialisation of Australian intellectual property. Announced as part of the 2009–10
Budget, and open to applications from January 2010, this major new initiative provides
assistance to innovators to help take their intellectual property to market and has $244 million
over 5 years to 2014, with ongoing funding of $82 million per year thereafter.

Tailored to meet the specific needs of the applicant, Commercialisation Australia assistance is
available under four components:
     Skills and Knowledge – up to $50 000 to access specialist advice and services.
     Experienced Executives – funding of up to $200 000 over two years (up to $100 000 per
        year) to engage an experienced Chief Executive Officer or other executives. Only
        companies are eligible for this assistance.
     Proof of Concept – grants between $50 000 and $250 000 to assist with testing the
        commercial viability of a new product, process or service.
     Early Stage Commercialisation – repayable grants from $250 000 to $2 million to
        undertake activities to develop a new product, process or service to the stage where it can
        be taken to market. Only companies are eligible for this assistance.
In addition, expert assistance is provided to program participants by their dedicated Case
Manager. Case Managers have extensive experience in commercialisation. Many have taken
their own products and services to market, and have good networks within industry. Program
participants will also have access to a network of volunteer business mentors who can share their
experiences in business.

Commercialisation Australia support is available to all sectors, and can provide support to
eligible renewable energy projects. To date it has funded 54 projects worth a total of $19.9
million. Of these, funding worth $9.5m has been awarded to 13 bioscience related projects,
$4.7m to 21 engineering and manufacturing projects, and $5.7m to projects in the IT and
telecommunications sector. More information is available from the website

In announcing the development of ACRE and Commercialisation Australia, the Government
required the responsible agencies to maximise complementarity and avoid overlap and
duplication between the two initiatives. To this end, the Department of Innovation consulted
ACRE and the Department of Resources, Energy and Tourism (DRET) during the development
of Commercialisation Australia. DRET was represented on the Government Committee that was
established to consider options for the format, governance and delivery of the program.
Commercialisation Australia continues to be available to consult with ACRE and DRET.

The AIP National Framework

The AIP National Framework encourages Australian governments to adopt a consistent national
approach to maximising Australian industry participation in major investment projects, in

Australia and overseas. The approach requires industry development policy in Australia to
follow a set of guiding principles:

   full, fair and reasonable opportunity;
   free of interstate preferences;
   regional development;
   competitive neutrality;
   value for money;
   transparency of process; and
   policy consistency and consistent with Australia’s international obligations.

The AIP National Framework sets out four strategic approaches to promote Australian industry

   encouraging industry to meet world’s best practice through capability building;
   early identification of opportunities for Australian industry participation both domestically
    and overseas;
   promoting Australian capability and integrating industry into global supply chains; and
   enhancing project facilitation and Australian industry participation.

The Government’s policy is to encourage project developers to maximise opportunities for
Australian industry to participate in major projects. Its key elements include:

   the Supplier Advocate initiative;
   the state-based Industry Capability Network (ICN) and the Supplier Access to Major Projects
    (SAMP) program;
   the requirement that tenderers for large Commonwealth procurements (generally above
    $20 million) prepare and implement AIP Plans setting out how full, fair and reasonable
    opportunity will be provided to Australian and New Zealand SMEs; and
   the Enhanced Project By-law Scheme (EPBS).

Supplier Advocates

Supplier Advocates provide leadership to targeted industry sectors to champion Australian
suppliers in the government procurement market and work cooperatively with industry to
enhance industry competitiveness, improve tendering practices and increase the use of
government programs.

Advocates play a strategic role by building on existing industry and government initiatives.
Advocates work closely with Industry Innovation Councils and industry stakeholders, focusing
on contestable government procurement opportunities and identified capabilities and capacity
(whether existing or potential).

In May 2010, Dr Andrew Parratt was appointed by the Minister for Innovation, Industry, Science
and Research as Clean Technologies Supplier Advocate to assist companies develop and market
their capabilities.

Australia’s clean energy industry incorporates renewable energy, energy efficiency and low
emissions technologies such as carbon capture and storage. For example, the Supplier Advocate
is working with companies in the energy efficiency sector through the Lighting Council of
Australia to help their members address issues around quality, marketing and strategic direction.
In the area of waste, the Supplier Advocate is working with the Waste Management Association

of Australia to help their members address issues around strategic industry roadmaps, national
workshops, environmental benefit assessments and standards.

Industry Capability Network Supplier and Supplier Access to Major Projects program

To assist capable and competitive Australian companies to identify and maximise opportunities
in the supply chain, the Industry Capability Network (ICN) helps Australian, New Zealand and
overseas businesses take advantage of new arising opportunities. The ICN matches capable and
competitive Australian companies with supply opportunities in major projects. It has offices
around Australia and New Zealand and uses technical experts to address the needs of specific

The Supplier Access to Major Projects (SAMP) program supports the Industry Capability
Network to work with project developers to match capable and competitive Australian suppliers
with project opportunities and increase Australian industry access to global supply markets.
Additional SAMP funding is being provided to enable the ICN to target the sectors most likely to
benefit from increased awareness of Australian industry capabilities. This includes appointment
of an ICN National Sector Manager for clean technologies, which include renewable energy.

The ICN reduces information barriers at the demand end by giving project developers and
procurement managers professional advice on Australian industry capabilities and helping them
develop tender packages and AIP Plans. It also helps them identify and short-list potential
suppliers. At the supply end, the network helps local suppliers identify and pursue project
opportunities through services such as the Supplier Access to Major Projects. It also links them
to other government services such as Enterprise Connect.

Australian Industry Participation Plans

Major project proponents often face considerable risks and costs in their decisions about optimal
supply and construction arrangements. Australian Industry Participation (AIP) Plans are a way
of overcoming information barriers between major project proponents and capable and
competitive Australian suppliers. AIP Plans outline the actions project developers will take to
provide Australian suppliers with full, fair and reasonable opportunity to participate in major
projects through all tiers of the supply chain.

Government policy is that the AIP requirements are to apply to all major Commonwealth
procurement and infrastructure projects (generally over $20 million). The AIP requirements
saves project proponents’ time and money, reduces their risks by broadening the supply base,
and deepens their understanding of the market.

AIP Plans do not give preference to Australian suppliers, who must still demonstrate that they
are competitive on timeliness, capabilities and whole-of-life-costs. The AIP planning process
simply helps reduce information barriers to the potential demand for Australian output by
offering major project proponents an opportunity to familiarise themselves with Australian
industry capability, identify qualified suppliers and to secure valuable support for the project
from industry, local communities and governments. At the same time it gives Australian
suppliers access to new opportunities, strategic partnerships and international supply chains.
Critically, it encourages them to analyse and extend their capabilities to accelerate the
development of new technologies.

Adopting this model to major ACRE demonstration/pilot projects and projects implementing
technologies with commercial potential would be a key enabler in achieving technology transfer
and take-up of successful Australian innovations in the renewable energy sector.

Enhanced Project By-law Scheme

Major projects often require highly specialised equipment or advanced technology inputs which
may not be readily available from local markets. The Enhanced Project By-law Scheme (EPBS)
provides tariff duty concessions on eligible goods for significant projects—including in the
construction of power supply, mining, resource processing, manufacturing, gas supply, and water
supply assets. The EPBS enables eligible goods not made in Australia or, technologically more
advanced, more efficient or more productive to those made in Australia, to be imported duty free.

To claim the tariff duty concession EPBS customers are also required to prepare and implement
an approved AIP Plan which helps to encourage the consideration of Australian industry
capabilities in projects and global supply chains.

Enterprise Connect Technology Innovation Network

Enterprise Connect is an Australian Government initiative that provides comprehensive support
to eligible Australian small and medium sized enterprises (SMEs). Core services include
Business Reviews at no cost to firms for eligible businesses and grant assistance to implement
recommendations flowing from the Business Reviews. The overarching goal is to improve
Australian SMEs and help them develop the skills, tools and knowledge needed to improve their
competitiveness and productivity and to maximise their growth potential. Enterprise Connect
operates as a national network of Enterprise Connect centres staffed by a team of highly skilled
Business Advisers to deliver these services and it has over 3550 SME clients.

As part of the Government’s election commitment for the Clean 21 initiative, the Enterprise
Connect Clean Technology Innovation Network brings Enterprise Connect Business Advisers
with specialist knowledge of clean technology together with companies, unions and researchers
to work with firms on ways to cut energy, water and material use, and help firms adopt new
technologies that will reduce their environmental impact.

Within the core Enterprise Connect Business Review service, there will be consideration of clean
technology issues including improving energy, water, and waste efficiency through a new
sustainability diagnostic tool. This process will also identify firms that are best positioned to
develop new sustainable products, services and skills.

Within Enterprise Connect, the Clean 21 Technology Innovation Network will encompass the
Clean Energy Innovation Centre which will be responsible for maintaining the network
knowledge base, including sources of external assistance.

Enterprise Connect Clean Energy Innovation Centre

The Enterprise Connect Clean Energy Innovation Centre assists businesses in the clean energy
sector, which includes firms involved in:

   the generation of energy from renewable and low carbon sources, such as solar, wind, wave,
    tidal, low emission coal, biofuels and cogeneration;
   commercial and industrial water, solar hot water, desalination and water efficiency;
   development and supply of methods, equipment and technology used to reduce energy
    demand or increase energy efficiency; and
   environmental technologies and services in waste management, recycling, environmental
    assessment, monitoring and remediation.

The Centre provides a range of services designed to link businesses in the clean energy sector to
new ideas, technologies and markets. Highly skilled Business Advisers deliver integrated,
practical services that help businesses improve productivity, build internal capacity and capitalise
on their growth potential. The Centre’s partner is a consortium made up of Newcastle
Innovation, the Australian Institute of Commercialisation and the Western Australian Sustainable
Energy Association. The complementary services ensure that the Centre has the necessary mix
of technical, academic and market based skills along with the national reach required. The Clean
Energy Innovation Centre has over 120 clients.

The Clean Energy Innovation Centre, along with the rest of the Enterprise Connect network, is
focussed on working with client SMEs to improve their fundamental business capabilities. Its
main value lies in the advice and connections that it provides. The recommendations that client
firms implement cover a broad range of business areas including:

   clearer strategic thinking - identifying where the firm wants to be in a year and in three years;
   being more efficient in their production processes and operations;
   being more effective in dealing with their supply chains;
   helping to clarify succession planning issues;
   establishing sensible business planning and monitoring processes;
   improving HR management that can empower their workforces;
   understanding more about their markets and customers;
   understanding their potential paths to market for new technology; and
   planning and implementing market driven innovation.

Where relevant, connections are provided to other sources of advisory or financial help like
Austrade, AusIndustry, or potentially ACRE.

The economic and societal benefits of Australian renewable energy IP will only be fully captured
if its SME sector is well run, alert, adaptive and outward looking. Enterprise Connect works in a
practical and applied way to help make this occur.

The Cooperative Research Centres (CRC) Program

The CRC Program supports end-user driven research collaborations to address clearly articulated,
major challenges facing Australia, many of which are global challenges. CRC activities include
research, utilisation and commercialisation, education and engagement with small and medium

Since being established in 1991 the CRC Program has funded several CRCs with a focus on
renewable energy, including the CRC for Sugar Industry Innovation through Biotechnology
(CRC SIIB). The CRC SIIB in partnership with the sugarcane industry, developed the base for
producing value-added materials from sugarcane-derived feedstocks, including alcohols and
other biofuels. The CRC SIIB was granted $28 million in CRC Program funding over seven
years from July 2003 to June 2010.

There are two CRCs currently undertaking projects to support renewable energy. The CRC for
Polymers is undertaking a project to develop an efficient, transformable polymeric photovoltaic
material. The Advanced Manufacturing CRC is also undertaking a project to use CO2 emissions
from power plants to grow algae which in turn can be used for a range of bioproducts including

The Minister for Innovation, Industry, Science and Research, Senator Carr announced three
priority areas for the 14th selection round to be held in 2011, including clean manufacturing.
Clean manufacturing could include bids focussing on developing renewable energy technologies
for the manufacturing sector.
Commonwealth Scientific and Industrial Research Organisation (CSIRO)
Within the Australian Government's Innovation, Industry, Science and Research portfolio,
CSIRO has considerable expertise in the renewable energy field. CSIRO carries out scientific
research to assist Australian industry and to further the interests of the Australian community.
CSIRO is developing the next generation technologies for energy production from renewables
and is finding new ways to integrate this type of energy into existing electricity grids or for use
immediately in the home. CSIRO is also developing smart energy systems to improve energy
efficiency and management in buildings, offices and homes, and to manage energy more
intelligently in electricity networks. Working in collaboration with industry, research
organisations and government, CSIRO is committed to developing cost-competitive, low-
emission energy technologies and helping mark out a pathway to a clean, viable and secure
energy future.
Australian Research Council (ARC)

The ARC is a statutory authority within the Australian Government's Innovation, Industry,
Science and Research portfolio. Its mission is to deliver policy and programs that advance
Australian research and innovation globally and benefit the community.

In seeking to achieve its mission, the ARC provides advice to the Government on research
matters and manages the National Competitive Grants Program (NCGP), a significant
component of Australia's investment in research and development. The ARC administers the
Australian Government’s National Competitive Grants Program (NCGP) and in 2010-11 NCGP
funding will total $708.733 million. Through NCGP the ARC is currently administering funding
provided to almost 4,650 research projects Australia-wide, involving more than 10,200
researchers. Through the NCGP, the ARC supports the highest-quality fundamental and applied
research and research training.

Design of the Emerging Renewables program

In regard to the challenges faced by ACRE in the design of the Emerging Renewables program,
it is recommended that consideration be given to using the services offered by AusIndustry, the
Australian Government's business program delivery division in the Department of Innovation,
Industry, Science and Research. AusIndustry customers include about 12 000 businesses and
more than 70 000 individuals with programs delivered for the Department of Innovation and a
number of external Commonwealth agencies. AusIndustry has a long history of strong customer
focus which is based on market research and real time continuous feedback through its network.
Through many years of program delivery and contact with thousands of customers the
organisation has developed an in-depth understanding of the key issues impacting on the very
small to large multinational businesses across a broad range of sectors. This knowledge and
access places AusIndustry in a unique position to assist other government agencies in reaching
and servicing their customers.

Specific strengths of the organisation include:

Australia wide network - AusIndustry has Regional Managers and Customer Service Managers
located in more than 20 offices across Australia and as a result has a strong local and regional

knowledge and presence. This network provides opportunities for targeted and cost-effective
delivery of programs.

Skilled customer service managers - AusIndustry has significant intellectual capital embodied in
its staff that collectively has a broad range and depth of knowledge and skills, covering all
aspects of the program delivery continuum.

Marketing and Channel Management services - AusIndustry has an in-house National
Marketing Unit and a Customer Channel Management Unit that coordinate the agency’s
marketing and public relations activities; employing channels such as web based initiatives,
events, strategic partnerships, sponsorships, merchandising, advertising and online promotions.
The AusIndustry Hotline in particular has a solid reputation among its customers and
stakeholders. The Hotline service in recent years has expanded significantly and now covers
services previously managed by other portfolio agencies.

Established Partnerships - The organisation has established a number of collaborative
relationships at three levels of Government which allow for seamless and effective delivery of
service and consistent customer experience. In addition to an already established working
relationship with the Department of Resources, Energy and Tourism, AusIndustry currently
works closely with Centrelink and Medicare, as well as partnering with the Australian Customs
and Border Protection Service, the Department of Climate Change and Energy Efficiency
and the Department of Defence. The organisation also collaborates with State/Territory and
local governments as they are key stakeholders in many of the programs delivered.

Program Design Framework and expertise in delivery - AusIndustry, over a number of years,
has devoted time and resources to developing a Program Design Framework based on a program
design total life cycle that has allowed the organisation to improve the quality, consistency and
efficiency of program design and implementation. This framework is seen as an exemplar across
the Australian Public Service.

Governance - All programs delivered by AusIndustry comply with legal and financial
obligations and are able to withstand scrutiny by external agencies, such as the Australian
National Audit Office (ANAO).

AusIndustry ‘brand’ - Through the use of a multi brand approach to marketing, other agencies
can leverage off AusIndustry's existing customer awareness and maximise their customer reach
without compromising their own brand.


The Department of Innovation, Industry, Science and Research’s industry development programs,
policies and program delivery capabilities provide ACRE and Australia’s renewable energy
sector with a vehicle to seek to maximise the benefits to Australia from ACRE’s work. They
provide a basis to build a strong role for Australian manufacturing (both in equipment supply and
maintenance), and in our knowledge based industries.

The Department of Innovation, Industry, Science and Research would be very interested in
pursuing these joint interests with ACRE.


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