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In today's edition:

Matt Kean's energy advice for the Liberal Party
The DMO: More than a benchmark for power bills
Gas producers meet in Brisbane

Getting back to 'engineering, economics and science'

Consultation on a 2035 emissions reduction target of between 65 and 75 per cent continues, and energy and electricity will do the “bulk of the heavy lifting of this task,” Climate Change Authority Chair Matt Kean told The Energy’s webinar audience.

Though he wasn’t expecting an announcement "anytime soon,” Kean said the target would be science-aligned, ambitious for the nation and achievable. The Climate Change Authority’s advice to the government needs to happen in time for Australia to share targets internationally in September.

“Obviously we've taken a bit more time to consider the impact of Donald Trump on the geopolitical and international policy settings, because Australia is not immune to that,” Kean said. “We will also consider the impact of tariffs and a range of other things.”

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Determination on price hikes amid transition

The Australian Energy Regulator (AER) set the Default Market Offer (DMO) for millions of residential and small business customers and warned price setting would only get more complicated.

Energy Consumers Australia CEO Dr Brendan French said the DMO existed to protect people, the most vulnerable, from paying disproportionately high electricity prices. “It’s not working effectively if it is priced 18 to 27% above more competitive offers,” he said.

Compare the Market’s Head of Energy Meredith O’Brien said households across Victoria, South Australia, South East Queensland and New South Wales would see changes to their electricity prices from July 1 as a result of the determination, regardless of whether they were on a standing offer.

Modelling by Canstar Blue estimates households on default plans could see their power bills increase by $71 to $228 over the next financial year.

AER Chair Clare Savage said it was a difficult decision, with ongoing pressures across the DMO cost stack and costs under intense scrutiny. (AFR) (The Age) (9News) (AAP) (News)

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Expert view

"It is time to leverage the massive battery disruption now underway.

Australia has been smashed for three years now from hyperinflation of fossil fuel costs – record high coal and methane gas prices. For all the climate luddites’ and vested interests’ misinformation associating higher electricity prices with renewables, the majority of our grid is powered by fossil fuels.

Grid transmission and distribution (T&D) costs are up significantly, both reflecting higher long term interest rates - largely outside the government's control - and as we invest to modernise the grid, which is necessary as, predictably, our unreliable end of life coal power clunkers are retired.

We need to relocate the grid to where the new generation is best located. With capital cost hyperinflation, that cost of T&D is starting to impact our electricity bills with more to come, unless the Australian Energy Market Operator updates its Integrated System Plan to better reflect the doubling of grid T&D new-build costs and the halving of battery prices, both in the last two years.”

Tim Buckley
Director, Climate Energy Finance

'Climate wreckers' gathering in Brisbane

The Queensland Conservation Council and Greenpeace Australia Pacific dubbed the Australian Energy Producers’ annual gathering the “climate wreckers’ conference”. Featuring keynotes and panels with top oil and gas executives, the event runs until Thursday with a post-election analysis on the final day.

“The attribution of costs for unnatural cyclones and flooding is coming soon. The Queensland Government needs to be focusing on getting these companies to pay their taxes and pay for the damage they’ve caused, rather than attending conferences sponsored by them. We are already getting 30% of our energy from renewable sources. We need to focus on building more renewable energy, backed by storage, not digging ourselves deeper into a climate hole with new gas.” — Greenpeace Australia Pacific Head of Climate and Energy Joe Rafalowicz

Catch up

Capital

Origin Energy (ASX: ORG) topped up its FY25 earnings guidance, citing operational improvements and wholesale portfolio benefits. Generation performance and electricity volumes have been strong, market conditions favourable and green certificate costs lower, according to the market update. Origin now expects FY25 Energy Markets Underlying EBITDA to be $1.3-$1.4 billion, compared to the previous guidance of $1.1-$1.4 billion.

A Wood Mackenzie report commissioned by gas lobby group Australian Energy Producers found global investment in gas exploration had grown by nearly 30% in the past five years, compared to 15% growth recorded over the same period in Australia. Wood Mackenzie said the reasons were complex, but included a slow recovery compared with peer countries in the wake of the 2014 fall in oil prices. A survey of Australian Energy Producers member CEOs found more than 90% believed regulatory and sovereign/political risk had deteriorated over the last five years, making Australia a less attractive place to invest.

Projects

A $1 billion wind farm earmarked for Central Queensland was axed by Deputy Premier Jarrod Bleijie, using ministerial powers. The 450MW Greenleaf Renewables development was to include 88 wind turbines and a battery energy storage system over 24 parcels of land at Morinish in the Rockhampton region. (ABC)

Victoria’s planning minister approved the Marinus Link project, subject to environmental requirements, including avoiding and minimising ecological impacts on threatened flora at Waratah Bay, threatened eucalypt species, threatened shorebirds and coastal dune habitat, waterways of high ecological value, threatened ecological communities and koala habitat. The project will connect to the NEM in the Latrobe Valley. It still requires federal approval under the EBPC.

Policy

The Energy asked Monday's webinar participants to rate their level of optimism on what the returned Labor government means for energy policy. These are the results:

Regulation

Türkiye's Ministry of Trade kicked off an anti-dumping investigation into Chinese-made junction boxes and aluminium frames used in solar modules. (PV Magazine)

Technology

The boffins at Watt Clarity said the NEM might be about to hit an all-time record for wind production.

Research

Conceptions of a future hydrogen economy have undergone a significant evolution over the past 50+ years. This study identifies three distinct ‘Waves’, or periods of high expectations for a hydrogen economy. (Energy Research and Social Science)

Researchers in South Korea forecast large-scale solar would be the lowest cost form of energy in the country by 2030. The researchers factored in social costs to compare the levelized cost of energy (LCOE) across solar and hybrid storage systems, wind, nuclear and co-firing with natural gas and green hydrogen, with the latter being the most expensive.

Random

People should confront their family members who read news from “nefarious” sources, suggests environmentalist Mike Berners-Lee. (Guardian)

What's on

May 26-29
Australian Energy Producers 2025

Former US ambassador Joe Hockey will deliver the keynote address at the Australian Energy Producers annual industry conference. Other speakers at the Brisbane event include Queensland Treasurer and Energy Minister David Janetzki, Woodside Energy CEO Meg O'Neill, Santos CEO Kevin Gallagher, and former RBA governor Dr Philip Lowe.

May 27
AER online forum for Project Marinus

The Australian Energy Regulator will host an online public forum to discuss its initial draft decision on Marinus Link's proposal.

May 28
National Press Club

Professor Brian P. Schmidt and Professor Richard Holden will address the National Press Club in Canberra on Securing Australia’s Sovereign Research Capability.

May 28-29
H2 2 ZERO Summit 2025

New Zealand’s Energy Minister Simon Watts, Japan’s Ambassador to NZ Makoto Osawa, and Rocket Lab Founder Sir Peter Beck are among diplomats, business leaders and researchers speaking at this event in Wellington.

June 3
Australian Offshore Wind Industry Forum

Victorian Energy Minister, Lily D'Ambrosio and CEC Chief Executive Kane Thornton are headlining this Clean Energy Council event in Melbourne.

June 6
National Competition Policy analysis 2025

The Productivity Commission’s call for submissions has a June 6 deadline for an occupational licensing scheme that provides for labour mobility nationally and other competition reform options identified as a priority during the policy study.

June 6
Energy Horizons 2025

NEM review chair Tim Nelson and ARENA General Counsel Dr Cameron Kelly are among the speakers at Macquarie University’s Energy Horizons 2025: Innovation Across Evolving Energy Markets event in Sydney.

June 11
Australia Energy Regulator stakeholder forum

An online forum will be held with electricity and gas retailers and other stakeholders to discuss the findings of the Review of payment difficulty protections in the National Energy Customer Framework.

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The Energy

Kean's energy advice for the Liberal Party