Australia looks set to launch a 200MW large-scale solar auction after the Australian Renewable Energy Agency (ARENA) revealed its new funding plan.

ARENA, which the government had threatened to disband, will focus on just two funding programmes. The existing R&D stream will continue with the second stream called 'Advancing Renewables'. The new funding strategy has been approved by minister for industry and science, Ian Macfarlane.

The organisation also list its five priorities: integrating renewables and grids, renewables for use in industrial processes, off grid areas, fringe of grid and constrained sections of the grid and large-scale PV.

“The five priorities represent current market imperatives or opportunities and are the main areas where ARENA investment can have the greatest impact at this point in time,” said Ivor Frischknecht, chief executive of ARENA.

“To date, ARENA has invested AU$1.1 billion in 230 renewable energy projects across the innovation chain, with each funding dollar leveraging close to two dollars of funding from other sources – these targeted priorities will allow us to build on our existing portfolio, creating the conditions that will accelerate change.

The proposed competitive solar auction would be open to grid-connected projects between 10-50MW. A consultation process is underway.

“We are proposing a new large-scale solar auction for approximately 200MW worth of projects, with AU$80-100 million (US$59-74 million) support from ARENA, and will be seeking feedback shortly with the intention to open the round in September 2015,” added Frischknecht.

The Clean Energy Finance Corporation (CEFC) welcomed the announcement and highlighted the potential of large-scale solar in the country.

“The solar potential of Australia is obvious but financing for large-scale solar has been difficult due to market and policy uncertainty,” said Oliver Yates, CEO, CEFC. “The CEFC stands ready to invest and help catalyse the additional funding required for the growth of large-scale solar in Australia.

“The CEFC will continue to work closely with ARENA to identify opportunities for debt financing that can help maximise the potential of the projects ARENA supports, including projects that are part of the announced large-scale solar auction. We will continue to apply our commercial approach to investment in renewable, low emissions and energy efficient technologies,” added Yates.

The auction represents a small step forward for large-scale solar in Australia, which had virtually ground to a halt during the prolonged period of political horse-trading over the future of the country's Renewable Energy Target. This was eventually resolved last month in a deal that saw the RET retained but scaled back.

But in what will be seen as a fresh attack by the Abbott government on Australia's shift to low-carbon energy sources, earlier this week the CEFC was served with a mandate aimed at blocking it from supporting schemes designed to support small-scale rooftop solar.

In response, John Grimes, CEO of the Australian Solar Council told the Guardian newspaper that the Australian solar industry was set to expand its campaign to target marginal Coalition seats to force the government either to change its stance on renewables or “pay the political price”.