Budget 2024: energy experts respond

Wednesday, 15 May, 2024

Budget 2024: energy experts respond

Following last night’s federal Budget, experts have offered their analysis of the energy policies put forward by Treasurer Jim Chalmers.

Energy industry funding included $549 million over eight years for support of battery manufacturing and $20.3 million over five years for the Powering Australia Industry Growth Centre and Future Battery CRC; $8 billion in renewable hydrogen tax incentives over 10 years; and $6.8 million over two years to support the offshore oil and gas decommissioning strategy.

Commenting on the government’s $835 million Solar SunShot program and $523 million Battery Breakthrough Initiative, co-founder of Neara Jack Curtis said that while these were good ideas from a long-term energy security perspective, the likelihood of both making substantive contributions to the 82% renewable energy target by 2030 was low.

Curtis advocated a coordinated approach to cost-efficiently and time-effectively generate and connect renewable energy. “To their collective credit, federal and state governments have already implemented numerous strong policies (including the Capacity Investment Scheme), which will support the necessary generation required,” he said.

“However, Australia still has two major constraints preventing the energy transition: permitting/planning delays and network availability and accessibility. With these two critical challenges to the energy transition remaining largely unresolved, we cannot afford to over-index on initiatives like the Solar SunShot program.”

The solution, Curtis said, is for the government to assess all parts of the equation and provide broader funding support to address network constraints. “Embracing behind-the-meter solutions and optimising the existing network is essential to reaching net zero targets and realising Australia’s role in the global net zero economy,” he explained.

“While greater investments in solar, battery technology and transmission can play a role in Australia’s long-term energy security, we must focus on strategies that solve our short-term energy transition and security goals. A coordinated, technology-driven approach should not be a supporting component, but must represent the next phase of the clean energy strategy.”

Commenting on the Future Made in Australia initiative (which includes Solar SunShot), Mark Croudace, CEO of MGA Thermal, urged the government to shift its attention to energy storage solutions.

“Australia’s energy transition is an evolutionary journey, and as the Treasurer said, it is the biggest transformation in the global economy since the Industrial Revolution,” he said. “To date, focusing on front-of-meter solutions like solar and wind has been an appropriate starting point. However, the emerging signal that we’re beginning to experience excess power generation during the middle of the day is an important one. It doesn’t mean we’ve overemphasised front-of-meter solutions, but rather that the time has come to diversify and change the mix.

“While Australia has made commendable strides in renewable energy investments, we urge the government to place greater emphasis on supporting energy storage solutions across the residential, commercial and industrial sectors. It will allow us to capture excess generation during periods of oversupply and deploy that stored energy when demand peaks. A holistic approach that balances utility-scale renewables with distributed energy storage is vital for Australia to effectively manage the evolving supply-demand dynamics of a clean energy future,” Croudace said.

Andrew Clennett, CEO and Cofounder of Hiringa Energy, welcomed the government’s allocation of $19.7 billion to accelerate investment in priority industries, including $8 billion to support production of renewable hydrogen.

“We encourage ongoing policy to allow the market to indicate where green hydrogen makes the most sense rather than relying on ‘picking winners’, which will ensure a broad range of projects deliver low-emission products to end users in the format they need, at the point they need it and at a scale that is consistent with actual demand,” Clennett said.

The Australian Academy of Technological Sciences and Engineering (ATSE) praised budget commitments to review the nation’s investment in Australian science and innovation, and to back clean energy industries, but warned that investment could not be kicked further down the road.

With Australia lagging behind the United States, Japan and Germany, which all spend more than 3% of their GDP on the research and development that powers their economies, ATSE cautioned that Australia’s investment in R&D will make or break the Future Made in Australia investments announced in the Budget.

“Investments in battery manufacturing, renewable green hydrogen production and critical minerals processing are central to the nation’s net zero ambitions; these are areas where we have a comparative advantage in the global supply chain and which are fundamental for the jobs of the future,” ATSE CEO Kylie Walker said.

“However, it is critical for the government to recognise that developing these industries requires innovations that will only come from a strong and well-funded science and technology sector.”

Image credit: iStock.com/Galeanu Mihai

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