|
Hey Reader, in today's edition:
- Productivity week
- Setting a floor for 2035
- Transgrid updates forecasts
|
|
|
|
Productivity needs to be plugged in
For many energy players, it’s all about green and red tape as the three-day Economic Reform Roundtable kicks off in Canberra. Whether it’s a ‘no’ or a ‘yes’ on an environmental approval, just get it done more efficiently to lower the cost of the entire electricity system and change the record on productivity, they say. But it’s also about tax policy.
On the eve of the summit, productivity tsar Danielle Wood said investment had slowed for many reasons but the tax system certainly didn’t help, advocating a cut in the corporate tax rate to 20%. “But just as significantly, our current system does not treat all investment equally,” Wood said in an agenda-setting address to the National Press Club. “It imposes the biggest cost on high-risk, long-lived and capital-intensive investment - the type that can offer the biggest productivity kicker. And by favouring debt finance over equity finance, it disadvantages smaller and newer companies.”
“A single national carbon price would be the most efficient and lower-cost - lowest-cost way to reduce emissions, particularly if it had bipartisan support to ensure its longevity. But without it, we can still make substantial progress by continuing to build a more consistent and market-based set of emissions reductions incentives. This means addressing some gaps in our current emission reduction policies for heavy vehicles, the electricity market post-2030, and smaller industrial facilities. And it means winding back duplicative and high-cost policies such as fringe benefit tax concessions for electric vehicles.”
Danielle Wood
Productivity Commission Chair
Investor Group on Climate Change CEO Rebecca Mikula-Wright warned the economy could lose $6.8 trillion between now and 2050 without genuine progress on climate change, with the government facing huge hits to productivity and credit ratings, higher costs, and lower tax receipts. Representing the views of superannuation funds and institutional investors managing more than $4.6 trillion, the group will advocate for:
- Fast-tracking approvals for the rollout of renewable energy infrastructure, working closely with communities to build social license and maximise benefit sharing
- Developing adaptation plans for key sectors and adding climate risk and adaptation to the mandates of the National Reconstruction Fund, Northern Australia Infrastructure Facility and Housing Australia
- Expanding the Safeguard Mechanism to facilities with 25,000+ tonnes of emissions (the current threshold is 100,000+ tonnes) which would capture more sources of emissions across the electricity, transport and mining sectors
- A carbon border adjustment mechanism to level the playing field for Australian exporters and removing fossil fuel subsidies such as the diesel fuel rebate that distort investment signals and delay decarbonisation.
HSBC Chief Economist Paul Bloxham said a recent report suggesting not one of the 76 renewables projects needing federal environmental assessment in NSW, Victoria or Queensland in 2023 or 2024 had received final approval was evidence the discussion should be about how to streamline the process, which stretches across layers of government, to speed-up these approvals, rather than whether it ought to be discussed at all.
|
Expert view
“There’s three key things for me. The first is getting approvals through more quickly … we can get approvals through more quickly, whether it’s a yes or a no, I think that’s what this market needs right now. It’s still taking far too long, there’s too many bodies involved, but we also need to make sure we get the social licence right. If we can get that more efficient, it means we can get assets into the market more quickly, more efficiently and more cheaply.
The second big one for us is what we call retail regulation. We work in a horribly complex environment. If we can make that less complex, at the same time still managing our customer requirements, that will also take cost out of the system.
And the last one, when I think about some of the language being used around tax and so forth, the last thing the energy industry and a company like AGL needs is further taxes because that will ultimately just go to us not being able to deploy as much capital into the transition.”
|
Damien Nicks
CEO, AGL
|
|
Setting a floor for 2035
The 2035 target matters. A Nationally Determined Contribution (NDC) submitted to the United Nations under the Paris Agreement on climate action is not just a percentage on a page, it is a signal to the world about how much we will build and how fast.
The 2035 NDC will set the tone for the next decade. It will shape investment flows, industrial strategy, and the confidence of communities asked to host change, Beyond Zero Emissions (BZE) CEO Heidi Lee writes for The Energy.
Further, hosting the COP31 is a chance to show that Australia can not just set targets but also deliver on them - and make our NDC a demonstration of what credible, community-aligned climate action looks like in practice.
|
Expert view
“Global capital is chasing credible delivery. Countries with “shovel-ready” decarbonisation projects will win the race for investment. Projects that meet high standards of international finance, including technical readiness, commercial viability, and strong community backing, will be the first to attract funding. That means government policy should set the floor for competition for finance, not the ceiling. The nations that outperform their targets will be the ones building sooner, faster, and with greater strategic focus.
NDCs should be judged not only by their headline figure, but by whether they trigger the right projects, in the right places, at the right time. Targets should start a chain reaction of real-world builds, not another cycle of plans that never make it to construction. Modelling by Beyond Zero Emissions shows that Australia could cut emissions by 81 per cent within eight years using six proven technologies: solar, wind, batteries, heat pumps, electric vehicles, and electrolysers.”
|
Heidi Lee
CEO, Beyond Zero Emissions
|
|
|
|
|
Catch Up
Capital
|
Transgrid forecast a 44% further drop in minimum demand in just two years in its 2025 annual planning report, representing a much swifter decline than the 15% drop by 2026 in last year’s report. The network owner expects demand from the grid to be hitting zero on spring afternoons by early next decade, creating challenges for system security. It also flagged at least 800MW of additional forecast data-centre load by 2035. (AFR) (Renew Economy)
Australia doesn't have a functioning gas market, and putting energy exports ahead of local supply is “madness”, BlueScope Steel (ASX: BSL) CEO Mark Vassella said. Australia’s largest steelmaker reported a sharp drop in FY25 profit after writing off two-thirds of the value of its steel coatings business in the United States. Vassella called for market intervention to lower gas prices for Australian businesses and households, along with a permanent domestic gas reservation and price mechanism. (AAP) (AFR)
Australia’s big battery boom has seen it overtake the UK to become the world’s third-largest market by installed capacity (behind the US and China), according to Rystad Energy. (Bloomberg)
One month into integrating hydro acquisition Manawa, Kiwi generator and energy retailer Contact Energy (NZE: CEN) posted a net profit of NZ$331 million in FY25 and operating earnings of $872 million, underpinned by a 34% uplift in geothermal generation. The reported figures include the release of the Ahuroa Gas Storage facility onerous contract provision of $98 million, taking the onerous contract provision to nil and reflecting “improved confidence in the ability to access storage capacity and the rising value of thermal flexibility”. Two new renewable energy projects, a gridscale battery at Glenbrook and the Kōwhai Park solar farm, are expected to go online in H2 FY26
“We now have an even more diverse and resilient generation portfolio, allowing Contact to offer more fixed price supply agreements to the market. Access to this type of hedging adds resilience, and support, for New Zealand’s large energy users to reduce their exposure to spot market prices in dry years.”
Mike Fuge
Contact Energy CEO
 Projects
|
Queensland completed a local network-connected 4MW/8MWh battery in Emerald ready to store excess electricity produced by local rooftop solar generation - one of 30 across the state either under construction or energised. Supporting Ergon Energy’s network, the battery can capture some of the 18.4MW of generation capacity from the 2,620 customers – 28% of the community – who have installed solar panels in Emerald.
Policy
|
The World Economic Forum’s First Movers Coalition (FMC) summit in Adelaide this week is part of a push to position Australia and Asia as leaders in green iron from homegrown feedstocks, and follows recent green iron events in Gladstone and Perth in the lead up to COP31. Outcomes from Adelaide, which is bidding to be the host city for the 2026 climate talks, will inform a Clean Energy Ministerial in Busan this month and shape the agenda for a green iron summit in South Korea/Japan next year.
Australia is “disappointed” an agreement was not secured on a global plastics pollution treaty in Geneva, after a coalition of oil‑producing states blocked binding limits on plastic output. Environment Minister Murray Watt said Australia wanted to see a coordinated global phaseout of problematic plastic products and harmful chemicals used in plastics, as well as better design of plastics to reduce waste and increase reuse. (The Conversation)
Regulation
|
Former AEMO Services boss Paul Verschuer said the energy transition was offering an exciting possibility to evolve towards a market that meets the basic criteria: balance, with numerous counterparties on both sides of the market; diversification, where market participants have different stimulus for participation; and free agency, which includes the ability to elect not to participate in a market for a period of time. (Renew Economy)
State policies and market operator rules have started to treat VPPs as core reliability resources in parts of the US. VPP provider Voltus had seen one large PJM emergency dispatch in six years, but has already had at least eight this year. (Latitude Media)
Technology
|
Hydrogen startup Carbon280 launched a pilot of its “Hydrilyte” storage technology in Kwinana, WA. The technology separates hydrogen from helium, enabling it to be stored for transport. The company raised $10.6 million in seed investment led by Woodside Energy, with support from UK-based renewable energy company Hive Energy and a Singaporean family office.
If artificial intelligence does bring a data centre boom, it could imperil clean energy goals and threaten affordability as electricity projections ramp up across the US. (TimesUnion)
Climate
|
The US Environmental Protection Agency’s “know-nothing” assault on climate science is based on “demonstrably false assumptions and assertions”, Cornell University’s Glenn Altschuler writes. (The Hill)
People
|
Felicity Wade is stepping down from the Labor Environment Action Network (LEAN) after 12 years of staunch advocacy and influence from within on the party’s policy direction. Co-convenor John Della Bosca will remain and National Organiser Louise Crawford will put herself forward for Wade’s co-convenor role.
Research
|
Australia’s five largest gas-fired manufacturers - Rio Tinto (ASX: RIO), South32 (ASX: S32), Orica (ASX: ORI), Dyno Nobel (ASX: DNL) and Wesfarmers (ASX: WES) - could face a $1.3 billion bill for carbon credits over the next 10 years to offset emissions if they fail to reduce their reliance on gas, according to research by shareholder advocacy organisation Market Forces. The research also found new gas supply had failed to lower prices or reduce risk for domestic users, as it was overwhelmingly directed to the export market, with LNG exports accounting for 13 times more gas than was consumed by Australian manufacturing.
“Australia’s biggest manufacturers, particularly alumina and ammonia producers, need to immediately step up and invest much more in the transition to renewable energy.”
Kyle Robertson
Head of Research, Market Forces
|
|
|
|
What's On
August 20
Green hydrogen as an alternative to natural gas
Michael Bielinski, Head of Projects Asia Pacific at Siemens Energy, will speak at this hybrid Melbourne Energy Institute event.
August 21
NEM Review Draft Report - Derivative Markets
This is a second in a series of online forums with the Panel undertaking the National Electricity Market wholesale market settings review.
August 26
NEM Review Draft Report - Long Term Incentives
This is the third in a series of online forums with the Panel undertaking the National Electricity Market wholesale market settings review.
August 26-27
Australian Renewable Heat Conference
Climate Change Authority Chair Matt Kean, ARENA investment manager Peter Haenke, and AGL sustainability expert Brendan Weinert will speak at this event in Sydney.
August 26-28
2025 New Zealand Wind Energy Summit
NZ Minister of Energy Simon Watts, Secretary-General of the World Wind Energy Association Stefan Gsänger, Global Wind Energy Council CEO Ben Backwell, Commerce Commission Chair Dr John Small, and Transpower Executive General Manager - Future Grid John Clarke headline this event in Wellington, NZ.
September 1-3
Farming Forever National Summit
Farmers for Climate Action CEO Natalie Collard, Rewiring Aeteroa CEO Mike Casey, NSW EnergyCo Chair Paul Binsted, ANU Director of the Institute for Climate, Energy & Disaster Solutions Professor Mark Howden and NAB Chief Climate Officer Jacqui Fox will speak at this Farmers for Climate Action event in Canberra.
September 2
Bias in action
ANU Institute for Infrastructure in Society Director Sara Bice, CEO of The Energy Charter Sabiene Heindl, Director of Partnerships and Engagement at Energy Estate Rosie King, and Head of Communications and Stakeholder Engagement at Ark Energy Melissa Pisani will speak at this renewable energy engagement webinar.
September 2-4
14th World Chambers Congress
OECD Secretary-General Mathias Cormann, CEFC Chair Steven Skala and Yurringa Energy CEO Arron Wood are among the speakers at this Melbourne event.
September 16
The Price of Power: The Future of Australia's Energy Sector
Bluescope Chief Executive, Climate Change and Sustainability Deborah Caudle, Alinta Energy CEO Jeff Dimery, AGL CEO Damien Nicks and Australian Energy Council CEO Louisa Kinnear will speak at this American Chamber of Commerce event in Melbourne, with R. Blair Thomas, CEO of US energy investment firm EIG speaking via Zoom.
RESULTS SEASON
Woodside Energy
August 19
Woodside Energy (ASX: WDS) CEO Meg O’Neill and CFO Graham Tiver will release half-year results and brief investors.
Santos
August 20
Santos (ASX: STO) will release half-year results.
|
|
|
|