Release of an Energy Policy Issues Paper Kicks off the First Round of Consultation
The Australian Federal Government (Government) has taken its first step towards creating a new national energy policy by releasing an Energy Policy Issues Paper (Issues Paper) seeking stakeholder input on a range of priority areas.
As signalled by the Coalition in its election campaign, regulatory reforms aimed at reducing electricity and gas costs for households and businesses will take centre stage in forthcoming Green and White Papers. Other key topics include measures to support export growth and foreign investment, increasing energy efficiency and ensuring long term security of energy supplies.
Alternative energy also gets a look in with the Government pledging its support for renewable and emerging energy sources, but also stating that the upcoming review of the Renewable Energy Target is to inform policy development on a low-emissions energy supply "that avoids market distortion or...increased energy prices". Indicating that all options are on the table, the Issues Paper discusses small modular nuclear reactors as well as mentioning cogeneration, trigeneration and bioenergy. However, the top priority for alternative energy appears to be the development of low-emission technologies, such as, carbon capture and storage that would allow Australia to continue its heavy dependence on coal and gas resources but also reduce its total greenhouse gas emissions.
Issues Paper Topics
The following is a brief summary of some of the main topics on which input is sought.
- Growth and investment:
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- commercial or market initiatives that could enhance growth and investment in the energy and resources sectors
- exploration and discovery to develop a multi-decade energy and resource projects pipeline
- opportunities for value-adding to coal resources for export
- ways to grow the export of value-added energy products and services
- ways to support businesses to maximise export opportunities for Australia's energy commodities, products, technologies and services
- the value of Australia's participation in a variety of international forums in encouraging foreign investment.
- Energy security:
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- ways to increase new gas sources to meet demand, particularly through untapped New South Wales' coal seam gas reserves
- how community expectations can be better understood and reflected in reliability standards for distribution and transmission networks
- the value of developing fuel reserves to meet Australia's treaty commitments and augment domestic security.
- Regulatory reform:
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- barriers to, or gaps within, the Council of Australian Governments' energy market reform agenda
- addressing planning impediments to utilising coal seam gas reserves
- reviewing existing network tariff structures in the context of rapidly growing deployment of distributed energy systems to ensure proper distribution of costs, including through fixed network costs, further time-of-use based tariffs and the use of smart meters
- increasing market competition by continued privatisation of state and territory owned energy assets and businesses
- measures to enhance transparency in gas market conditions
- streamlining environmental approvals.
- Energy efficiency and productivity:
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- encouraging demand side participation and energy efficiency to reduce peak energy use
- increasing energy efficiency within the transport sector.
- Alternative and emerging energy sources and technology:
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- ways to encourage a lower emissions energy supply that avoids market distortion or causes increased energy prices
- encouraging competitive renewable and low-emission technologies and alternative energy sources and their effective integration within the wider energy market
- encouraging use of competitive alternative transport fuels and electric and biofuel vehicles.
Critique
The Issues Paper has a surprisingly light focus on long term strategies for securing Australia's energy needs (in the likely context of an international framework for reducing greenhouse gas emissions). The lack of emphasis on finding new areas of resources indicates the Government is leaning towards an energy policy that is heavily reliant on coal at the expense of encouraging unconventional gas and renewables. If this proves to be the case, then Australia will be bucking international trends, while countries like the United States and Germany make huge investments in unconventional gas and China and Brazil plough funds into developing renewables.
The 2012 Energy White Paper, released by the former Labor Government, had a substantial emphasis on developing reserves of unconventional gas and encouraging offshore and coal seam gas exploration and production. While it is too early to tell whether the Coalition Government will scale down this gas agenda, the current Issues Paper appears to prioritise relatively minor regulatory reform in the electricity sector above longer term planning.
Making a Submission
Submissions on the Issues Paper are due by Friday 7 February 2014 and can be emailed to EWP@industry.gov.au. A Green Paper will be released for consultation in May 2014 and the Energy White Paper will be completed in September 2014.
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