Clarion call to big energy users


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In today's edition:

  • Bowen eyes east coast gas reservation
  • Heads up for uncontracted energy users
  • Energy Independence Day

Gas review seeks quick turnaround

The federal government “opened” a six-month review of gas market regulations, after more than a year of legwork, to examine:

  • The Australian Domestic Gas Security Mechanism (ADGSM)
  • The Gas Market Code
  • The Heads of Agreement with major east coast gas exporters.

Minister for Climate Change and Energy Chris Bowen said gas had an important role to play in the energy system as part of the shift towards 82% renewables, with fast-start gas peakers providing the “ultimate backstop” in the energy grid.

Bowen said heavy industry and five million households still relied on gas and, while many were electrifying, there was also a rapidly depleting supply of gas in the Bass Strait in particular. He also left the door open for an east coast gas reservation policy, if that proved to be a sensible way to ensure access for domestic users, but said that wouldn’t mean ripping up existing export contracts.

Meanwhile, the Australian Competition and Consumer Commission (ACCC) reiterated in an inquiry update that short-term gas supply was sufficient but put producers and government in the naughty corner.

“Shortfalls in southern states and reliance on Queensland gas is compounded by uncompetitive market structures. Upstream gas markets remain highly concentrated and dominated by the Queensland LNG producers and their associates, who control over 90% of east coast reserves. The decisions they make about exports and development of their reserves are key drivers of domestic supply adequacy, competition, and market outcomes. The ACCC considers it critical to gas market efficiency and long-term energy security that underlying impediments to the development of domestic supply are addressed.” - ACCC Gas Inquiry 2017-2030: Interim update on east coast gas market

Clarion call to big users

Corporates have been warned to wake up to structural changes underway in energy markets, particularly big users who are uncontracted beyond 2026.

Miners, manufacturers, data centres, large retail chains and other energy-intensive industries exposed to spot prices are at risk, according to a risk analysis released by energy advisory firm ERM Energetics.

“If you’re uncontracted through to 2030, you must act now or risk a future where you will be forced to recontract for supply amid potentially heightened uncertainty and volatility.” - ERM Energetics Head of Renewable Energy Investments Anita Stadler

As flagged by the ASX in May, the exchange will list new Morning and Evening Peak Electricity Futures Contracts, already live with NSW from June 30, followed by Queensland on July 7, Victoria on July 21, and South Australia on July 28.

The new contracts are designed to reflect the primary periods of operational demand in the National Electricity Market, which involves listing separate Morning and Evening Peak Futures Contracts across each of those regions on a quarterly basis out to four years.

Energy Independence Day

Most (96%) Australian homes with rooftop solar don’t have a battery attached to it, but that should change after July 1.

The federal $2.3 billion Cheaper Home Batteries Program gives households, small businesses and community organisations an upfront discount of around 30% on the cost of installing a battery. Intended to be “stacked” with existing state and territory subsidies, WA solar owners can combine federal and state battery subsidies for example, but NSW replaced its incentive scheme with one that ties a new battery to participation in a Virtual Power Plant (VPP).

"With the right policy, technology and consumer support, Energy Independence Day marks the commencement of Australia’s home battery revolution … Home batteries are no longer unaffordable - with the new rebates and no-interest loans they are now driving energy independence and lowering household costs.” - Clean Energy Council GM Distributed Energy Con Hristodoulidis

In an arrangement made by the Clean Energy Regulator, batteries must meet stringent safety standards to make an approved products list managed by the industry’s council.

The extension of the instant asset write off of $20,000 also kicks in from July 1, as does a $10,000 incentive for construction apprentices.

“And we know that it works, because our New Energy Apprenticeship incentive has already seen 11,000 people go into the new energy sector, making sure that they can help deliver the shift to renewables, making sure as well that they will have good, secure jobs going forward,” Prime Minister Anthony Albanese told reporters in Canberra.

Catch up

Capital

State-owned green bank the NSW Energy Security Corporation (ESC) officially opened for business with $1 billion of funding for investment in large-scale storage and enabling assets. Established last year to accelerate private sector investment in clean energy projects and support NSW achieving its emission reduction targets, the ESC announced its board would be chaired by public policy expert Cameron O’Reilly. Other board members include David Borger, Helen Conway, Michael Cummings, Sharon Eacott, Katerina Kimmorley and Daniel Papps.

An international consortium axed Australia’s largest green hydrogen project, after the withdrawal of Queensland’s state government-owned energy company. (ABC) (Sky)

Hong Kong-owned Alinta Energy committed to building its Reeves Plains Energy Hub Battery, located north of Adelaide, and appointed GenusPlus Group (ASX: GNP) as Principal Contractor for a contract worth $105 million. The hub includes a 500MW battery (in two 250MW stages) and a proposed 300MW gas turbine power station. Construction of the big battery will begin in early 2026, with stage 1 - equivalent to powering 300,000 households for up to four hours - expected to be operational by 2028. A takeover target for EnergyAustralia, Alinta confirmed it was open to all options. (Listcorp) (Renew Economy) (AFR)

“We’re not just planning energy storage anymore – we’re building it. Early works are underway, procurement is well advanced, and the site is being prepared for the build. We’re also talking to neighbours and the community about what construction will mean for them.” - Alinta Energy Chief Development Officer Andres Maasing

A Narrabri deal has been touted as part of Abu Dhabi’s $30 billion Santos (ASX: STO) takeover, with Beach Energy (ASX: BPT) mooted as a possible buyer of the stalled project, according to The Australian.


Projects

Transgrid said the start of the NSW Government’s Strategic Benefit Payments Scheme was an important milestone for landholders affected by major transmission projects, with payments coming into effect after the infrastructure is built and energised.

“Eligible landholders along the western section of EnergyConnect will begin receiving their first payments after 1 July, following energisation of two new transmission lines from Buronga to the South Australian border and into Victoria.” - Transgrid CEO Brett Redman

Eligible landholders under the scheme will receive compensation of $200,000 per kilometre of eligible transmission infrastructure hosted on their property in annual instalments over 20 years. And if you host two sets of transmission lines, you'll receive payments for each line. Projects may include:

  • renewable energy zone network infrastructure projects
  • priority transmission infrastructure projects
  • other transmission infrastructure projects identified in the Australian Energy Market Operator’s Integrated System Plan.

So far, eligible nation-critical infrastructure includes high-voltage transmission lines from the Central-West Orana Renewable Energy Zone Transmission Project, Hunter Transmission Project, Project EnergyConnect, HumeLink, and Victoria-New South Wales Interconnector West.


Policy

Energy retailer CovaU was fined $341,724 for alleged unlawful cold-call telemarketing of former customers, Victoria’s Essential Services Commission said. Fined in relation to prohibited conduct affecting eight customers, CovaU has since terminated its contract with its telemarketing firm and beefed up compliance with obligations on unsolicited sales, record keeping and self-reporting. Cold-calling and win-back offers were banned by the state in 2021 to protect energy customers from high-pressure sales tactics.

“Wrongdoing has consequences, and we make sure they are felt. The Essential Services Commission expects energy retailers to have systems in place to ensure they are abiding by the law, especially where third parties are utilised to engage with customers. Keeping consumer protections front of mind is paramount – particularly given the current cost-of-living pressures faced by Victorians.” -Commissioner Gerard Brody

UK energy regulator Ofgem has been modelling what the market would look like if it faced another gas crisis in 2030 after the UK's planned build out of renewable energy is complete. “And the early indications from that analysis are actually [that] we would be a lot better off as a country,” Ofgem CEO Jonathan Brearley told Carbon Brief in a wide-ranging interview.

“The main thing we are trying to do is have a stable system, a system that’s more within our domestic control, not totally within our domestic control, but one that allows us to manage this international volatility that, quite frankly, no government or regulator can control.”


Regulation

Corporate regulator ASIC sued Delta Power & Energy for market manipulation. ASIC alleges the Vales Point coal plant owner manipulated the ASX 24 market for electricity futures contracts on dozens of occasions between September and October 2022.

The Australian Energy Regulator (AER) signalled a review of Shared Asset Guidelines, last updated in 2013, after a standalone power systems (SAPS) rule change raised broader issues including:

  • the limited customer benefit under the 2013 Guidelines, as customers only receive 10% of unregulated revenues earned via regulated assets
  • the evolving role of DNSPs with the rise of consumer energy resources in a two-sided energy market
  • transparency of critical network data, including locational information
  • the evolving roles of DNSPs in providing community batteries, network control assets, and kerbside network assets for EV charging infrastructure
  • SAPS customers having an option of being charged network tariffs directly by a DNSP rather than through retailers
  • potential regulatory changes (ring-fencing obligations, cost allocation and service classification) to better promote the interests of customers, rather than the use of ringfencing waivers.

Climate

Negotiators doubt countries’ financial and environmental commitment as conflict and trade wars divert attention from COP30. (The Guardian)


People

Nevenka Codevelle, who leads AEMO’s independent subsidiary AEMO Services, will stay on as CEO of the AusEnergy Services Limited (ASL) after its name change.

Francesca Muskovic will join the Investor Group on Climate Change as Executive Director, Policy after a stint of almost 10 years at the Property Council of Australia.

“Investors need certainty on Australia's long-term policy trajectory and competitive settings to ensure Australia is at the forefront of the global race for capital and investment in the net zero transition.
With the prospect of Australia hosting COP31 in 2026, the eyes of the world will be focused on us and our Pacific neighbours. There is no better backdrop to commit to the strongest possible 2035 emission target, drive the reform necessary and attract investment to the vast opportunities the transition provides.” - Climate policy leader and podcaster Francesca Muskovic

Research

Jonty Flottman’s latest PhD paper, The forward market dilemma in energy-only electricity markets, co-authored with supervisors Paul Simshauser, Philip Wild and Neda Todorova, has been published in Energy Economics. Building on an investigation of derivatives and hedging practices in Australia’s NEM, this paper examines how market liquidity is impacted as baseload coal-fired generation is replaced by off-market contracted renewable energy.

The Local Aboriginal Land Council Powershift report, developed in a joint research initiative involving UNSW Sydney and UTS, sets out practical steps the NSW Government could take to support Aboriginal land councils in edge-of-grid and REZ settings. To date, the Aboriginal land council estate in NSW has not been actively used in the energy transition, which has limited participation in the energy transition and ring-fenced the benefits elsewhere.

What's on

July 17-18
Carbon Capture APAC Summit

Chevron General Manager of Energy Transition David Fallon, Beach Energy CEO Brett Woods, CarbonNet Project Director Jane Burton, Geoscience Director of Offshore Energy Systems Merrie-Ellen Gunning are among speakers at this event in Melbourne.


July 17-18
Australia Wind Energy 2025

VicGrid CEO Alistair Parker, Siemens Gamesa Global CEO Vinod Philip, New.E co-lead Clare Larkin-Sykes, RWE Renewables CEO Australia Daniel Belton, Engie AU Chief Renewables Officer Laura Caspari, ACCIONA Energía Australia MD Brett Wickham and CEFC Director, Investments, Nick Hawke are among the line-up at this Melbourne event.


July 22
Smart Energy South Australia

Federal Energy Minister Chris Bowen will headline at the Smart Energy Council conference and expo in Adelaide.


July 29-30
Australian Clean Energy Summit (ACES) 2025

AEMO CEO Daniel Westerman, AEMC Chair Anna Collyer, Climate Change Authority Chair Matt Kean, AGL CEO Damien Nicks, Iberdrola Australia CEO Ross Rolfe and Squadron Energy CEO Rob Wheals are among the lineup at the Clean Energy Council’s flagship event in Sydney.


July 30
Australian Sustainable Finance Summit

Treasury Deputy Secretary Angelia Grant, Original Power Executive Director Karrina Nolan, and Australian Office of Financial Management CEO Anna Hughes are among the line-up at this Sydney event.

The Energy

The Energy is dedicated to covering the business of energy and in particular the people, capital, projects and emerging technology behind the energy transition.

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