CARBON

Courage needed to eat industrial gas

Pilot projects, a better understanding of the economics and some basic courage could help shift the dial on decarbonisation by Australian heavy industry, according to sector experts.

In a Climate Action Week event on “Eating the industrial gas elephant: one piece at a time” Rystad Energy head of advisory for ANZ Perry Wilson said Australia ranked slightly above the global average when looking at electricity as a percentage share of final energy demand.

But there was still a lack of impetus in industry to move away from gas towards new forms of energy, despite the fact that “these are not new innovations anymore, we just need to get them to scale”.

“Large-scale players backing away from renewables targets and all the noise about renewables being hard to make work obviously doesn’t help,” he said.

Wilson welcomed what he said was a “pragmatic approach” by large electrification players now talking about gas as a backup.

“I think for too long the story is I’m either pro renewables or I’m pro oil and gas or I believe in climate change or I don’t. We’re in a transition and a transition takes time,” Wilson said.

The discussion coincided with Rio Tinto signing a landmark 20-year deal with Edify Energy for a solar and battery solution to electrify Rio’s Gladstone aluminium operations.

Why it matters

• Industry accounts for much of Australia’s most stubborn, or hard to abate, emissions.
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• Australia’s highly volatile energy price market provides opportunities for heavy industry companies to benefit from electrification.
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• There are increasing options to test electrification alongside existing energy supply.

POLICY

Pressure builds for election announceables on batteries

Australia may lead the world per capita on rooftop solar but only one in three installations have a battery storage system installed, the Clean Energy Council’s Rooftop Solar and Storage Report report released on Monday found.

For the fifth consecutive year, more than 300,000 Australian homes and businesses installed rooftop solar. There were 159,011 rooftop solar systems installed during the latter half of 2024, pushing the total past four million rooftop solar installations by November.

Rooftop solar generated 30,178GWh of electricity in 2024 - 12.4 per cent of Australia’s total supply and almost doubling from 6.5 per cent in 2020.

But much excess energy generated during the day is going to waste as existing feed-in tariffs offer little incentive to leverage the vast resource.

Grassroots organisation Solar Citizens has been pushing for $2.5 billion for a Federal Home Battery Rebate under the Small-scale Renewable Energy Scheme (SRES) to fund 1 million home batteries to firm the grid and bring down energy prices.

On current polling and known policy platforms, a minority government with crossbenchers would favour a greater hand for renewables in achieving net zero - and potential tax reforms.

According to Deloitte Access Economics Partner Stephen Smith, the longer-term structural deterioration of the budget bottom line should be “a reality check for politicians wanting to announce election sweeteners in the weeks ahead”.

Following two consecutive surpluses, the federal government’s pre-election budget is expected to reveal an underlying cash deficit of $26.1 billion and revenue downgrades of $11.3 billion over four years, according to the consultancy’s Budget Monitor shared with The Energy.

“While lower inflation and commodity prices mean temporary revenue tailwinds are slipping away, structural challenges are pushing government spending needs steadily higher,” Smith said.

“Against this backdrop, it is critical that each new dollar of spending is delivering value for money. Unfortunately, in the lead up to a federal election, that is not the case,” he said.

“It’s worth noting that a minority government of either persuasion would present further political challenges for the budget … That said, in the current parliament, it is the crossbenchers who have advocated for the most sensible reforms to the tax system.”

POLICY

“Good, bad and ugly” as ministers inch forward on reforms

Distributed and consumer energy resources are an important part of the energy transition - and a future safeguard against increasingly severe weather events.

But technical standards for consumer energy resources (CER), and a regulatory framework to enforce them, are needed to extract the full value for the electricity system, energy ministers agreed at their most recent catch-up.

The political fallout from ever-higher energy prices was also front of mind, according to the post-meeting communique, with ministers from Default Market Offer regions (NSW, South East Queensland and South Australia) critical of the recent draft determination.

The Australian Energy Regulator was urged to dig deeper into retailer revenues and margins, sector-wide inflation and cost of living pressures when settling the final offer by May.

Expert view - Dr Gabrielle Kuiper,
Strategy consultant/DER specialist

Meanwhile energy ministers were backing more gas “to help support Australia’s transition to net zero” and gave the green light to officials to draft new laws to allow the Australian Energy Market Operator (AEMO) to intervene in the gas market. A final decision will be made in July on expanding AEMO’s powers to secure supply as a last resort.

Expert view - Dr Bruce Mountain,
Director, Victoria Energy Policy Centre

Energy ministers also recognised the need to do more than tell consumers to shop around to find a cheaper energy supply. Dubbed the Better Energy Customer Experiences program, for electricity and gas retailers, a paper on the new consumer protection regime will soon be released for consultation.

Energy Consumers Australia Chief Executive Dr Brendan French said the program included the potential development of an overarching consumer duty, similar to the banking sector. “The time is well overdue for there to be duties to consumers, rather than simply obligations on consumers,” French said.

CATCH UP

Policy

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Australia needs to further bend the curve on emissions, and focus on the economic transformation that accompanies decarbonisation, the Grattan Institute said in its latest pre-budget 'Orange Book' of policy priorities for the federal government. It recommended the government create a national net zero plan, maintaining the 2030 target and setting the 2035 target at 65-75 per cent below 2005 levels, For the energy sector to deliver on this it recommended an updated role for gas price caps, an economy-wide carbon pricing framework, an extended role for the Integrated System Plan, strengthening of the Safeguard Mechanism (due for review in 2026/27) and a comprehensive plan for integrating Consumer Energy Resources.

Set to be a feature of the pre-election budget on March 25, there’s a growing list of financial support available for combining local ores and renewable energy sources instead of fossil fuels to make green metals.

A new $750 million round of funding was announced for low-emissions technologies, to be administered by the Australian Renewable Energy Agency (ARENA). Pilot and demonstration projects for green metals manufacturing will be at the front of the queue.

Projects

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Lightsource BP’s 585MW Goulburn River solar farm has commenced construction after inking a power purchase agreement with a major coal export terminal, Newcastle Coal Infrastructure Group (NCIG). The group said the project would provide renewable energy for NCIG’s Kooragang Island facility from 2030 and would also contribute to the local grid.

Capital

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Danish fund manager Copenhagen Infrastructure Partners raised more than EUR12 billion for its latest green power fund, which it said would be invested in renewable energy projects “across low-risk OECD countries in Europe, North America and Asia Pacific”.

Carbon

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Ed Miliband is the first British energy secretary to visit the world’s biggest emitter since 2017. Miliband arrived in Beijing on Friday for three days of talks on energy supply chains and critical minerals. He will also sign a refreshed UK-China Clean Energy Partnership, updating their approach to engaging in this policy area for the first time in a decade. “This is about learning lessons from each other about how we decarbonise, from carbon capture to hydrogen,” he said in an opinion piece published by The Guardian.

​German emissions fell 3.4% in 2024, on track for 2030 climate goals (Reuters)

Technology

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Marking five years since then Prince Charles founded the Sustainable Markets Initiative, the Terra Carta Roundtables & Exhibition in London saw 400 CEOs, innovators & political figures convene to lay out the economic case for transition to continue. Australian billionaire Dr Andrew Forrest welcomed King Charles III to the Terra Carta Exhibition and demonstrated Fortescue’s technologies to accelerate industrial decarbonisation.

New Zealand's electricity generation from geothermal grew by 15.6 per cent in 2024 and now accounts for 23.1 per cent of total generation (IEA).

People

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WA Department of the Premier and Cabinet Director General Emily Roper will finish on Friday March 21, Premier Roger Cook announced. Career public servant Richard Sellers, Director General of the Department of Energy, Mines, Industry Regulation and Safety since 2021, will act in the role while the Public Sector Commission runs a recruitment process to find Cook a new DG.

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What we're listening to

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Energy Efficiency Council chief Luke Menzel and Ai Group director, climate change & energy, Tennant Reed, go meta on the recent Blueprint Institute and the McKell Institute report on how the energy policy sausage is made.

What's on

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Thimo Mueller, General Manager, Commercial at AEMO Services will speak alongside Nexa Advisory CEO Stephanie Bashir and Tim Buckley, Director, Climate Energy Finance Australasia on day one of the Energy Storage Australia conference on Tuesday March 18.

Climate Change Authority Chair Matt Kean will speak at the Climate Investor Forum on March 19. Other speakers include Quinbrook Infrastructure Partners co-founder David Scaysbrook, APAC managing director for BlackRock’s Global Infrastructure Partners Valerie Speth, Climate Asset Management chief investment officer Ben O’Donnell, IFM Investors executive director for infrastructure Marigold Look, Pollination MD Megan Flynn, Admantem Capital MD Andrew Bullock and Trawalla Group MD Alan Schwartz.