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The missed China opportunity
Red flags on Ausgrid ruling
Another blow to offshore wind

Vulnerability or opportunity as China rises

Australia risks being one of the world’s losers as the sheer scale and depth of China’s green energy statecraft and unprecedented economies of scale bring about a profound shift in the world’s economic, geopolitical and energy landscape, a think tank warns.

China’s US$180 billion in overseas clean tech investment since 2023 is driving the energy transition and bankrolling global supply chains, but its investment in Australia has collapsed with others benefiting as host countries for new industries and manufacturing, according to a report by Climate Energy Finance (CEF).

With Team USA red-carding itself off the net-zero playing field, there’s only Team China. Integration is occurring across renewable energy and green industrial ecosystems as it develops partnerships and manufacturing capacities in Europe and Southeast Asia as well as Africa, the Middle East and South America to further strengthen its green tech leadership, capital reach and engineering, procurement and construction (EPC) capabilities.

The Rising Tide report urges Australia’s decision-makers to overcome national security fears, remove foreign investment and foreign policy roadblocks, and work with China on building domestic capabilities — or get left behind in the “new world order” beyond fossil fuels.

“US tariffs, unilateralism and regression on renewables have further accelerated the shift in the centre of gravity of global commerce towards China and emerging economies, as countries seek to diversify their economic and political partnerships away from an unstable US and achieve their sustainable development goals,” lead author CEF China analyst Caroline Wang said.

“The real challenge isn’t to cut China out, it’s to build more diversified, resilient supply chains that still tap into China’s know-how while helping other countries grow their own clean industries. If they don’t, by the time their local industries finally get going, Chinese companies may have already pulled even further ahead."

Dr Muyi Yang, Senior Energy Analyst, Ember

“Australia does not have the domestic industrial base, technical expertise, skills or homegrown capital to do it alone. Yet major clean-tech partnerships with China’s innovators – whose balance sheets, technologies and supply chains dominate the global clean energy economy – remain conspicuously absent here. Our failure to engage in strategic investment and technology partnership in these key sectors puts at risk our capacity to deliver on the key goals of FMIA. Australia has an opportunity to align economic ambition with geopolitical reality. Preserving our security relationship with the United States should not preclude deeper collaboration with China in areas of shared economic and climate interest.”

David Olsson, National President of the Australia China Business Council

Not happy in the sandbox

The Australian Energy Regulator’s decision to grant Ausgrid a sandbox waiver for its Community Power Network trial undermines competition and sidelines the consumer protections that underpin the National Electricity Market (NEM), according to one critic.

Ausgrid, the monopoly Distribution Network Service Provider (DNSP) for a large area of NSW, will own and operate 130MWh of battery assets in the Mascot-Botany area of Sydney and in the Charmhaven region of the NSW Central Coast during the five-year trial, as well as install up to 70MW of solar generation assets as a supplier of last resort.

“The Australian Energy Regulator (AER) has handed Ausgrid a permission slip to expand its monopoly. The Ausgrid sandbox ‘trial’ is not innovation, and this decision is regulatory overreach that threatens competition, transparency and puts consumer needs at the bottom of the list. We are calling for an urgent independent review of DNSP practices.

Consumers in a competitive market have driven the significant growth of consumer energy resources in Australia, not monopoly networks. This decision risks locking out innovators, confusing consumers, and entrenching market power where it does not belong.”

Nexa Advisory CEO Stephanie Bashir

The AER said the first policy-led waiver from ring-fencing rules, which exist to restrict the ability of monopoly network service providers to offer services in contestable markets, followed careful consideration of extensive stakeholder feedback.

The waiver covers the installation, operation and trading of energy storage devices and additional incentivised solar within the two trial sites, and Ausgrid must engage with the commercial market to provide battery installation and procurement of any solar or battery assets under the terms of the published decision. Nor can Ausgrid directly impose costs for the trial on its customers through a reassessment of its current regulated asset base.

For the benefit of a competitive market in Consumer Energy Resources (CER) and Distributed Energy Resources (DER), Ausgrid must also operate a third Spatial Energy Plan Location, not subject to the waiver, with the comparable connections and tariff arrangements available to a similar-sized residential-industrial consumer cohort.

“This third location will allow service providers in the competitive market to explore opportunities to test and trial their own innovative energy solutions on an equal footing to the trial. Maximising the use of distributed energy resources such as community scale batteries is the next step in Australia’s energy transformation. Let’s learn what we can from this trial to inform the shape of future energy services.”

AER Board Member Lynne Gallagher

Catch Up

Capital

The AGL-backed (ASX: AGL) consortium behind the proposed 2.5GW Gippsland Skies offshore wind project surrendered its licence, further jeopardising Victoria’s coal-exit plans. It was one of 11 projects granted a feasibility licence by the federal government in Australia’s first offshore wind zone, and the zone’s third project to be dumped. “AGL will prioritise options in its development pipeline of onshore wind, batteries, pumped hydro and gas firming projects,” the company said. (ABC) (AFR)

WA Energy Minister Amber-Jade Sanderson is on a trade mission to South Korea where she will meet major industry partners to promote the state’s energy transition and try to attract investment in battery manufacturing, ammonia production, green iron and steel, and transmission infrastructure.” (The West)

Squadron Energy, the private renewable generation group controlled by Twiggy Forrest and family, has secured $1 billion in financing for its massive Clarke Creek wind farm in Queensland. The deal, arranged with a group of 10 lenders and supported by Squadron’s existing banks, set a market benchmark for single-asset wind financings, the company said. (AFR)

Projects

Equis Australia and SEC switched on the $1.1 billion Melbourne Renewable Energy Hub, which is positioned where Victoria’s critical transmission routes join to support the Melbourne metropolitan load and is the only BESS in Victoria capable of supporting three Victorian Renewable Energy Zones. “Our engineers designed a world-first underground 500kV cable connecting a BESS into existing gas-insulated grid infrastructure, our investment team secured a landmark $400m debt package and it has been impressive to watch the project take shape from Notice to Proceed in December 2023, installation of 444 Tesla megapacks and three Toshiba 500kV high-voltage transformers,” Equis Managing Director David Russell said.

Chevron Australia and its Gorgon partners have taken a Final Investment Decision (FID) on the Gorgon Stage 3 development off the northwest coast of WA. The A$3 billion backfill project will connect the offshore Geryon and Eurytion fields in the Greater Gorgon Area to the existing infrastructure and processing facilities on Barrow Island, sustaining Gorgon’s 15.6 million tonnes of LNG per year and up to 300 terajoules per day of domestic gas for WA. (The Australian) (ABC) (AFR)

A grass-fire sparking during weekend NSW's heatwave has damaged the 400MW Lightsource bp solar farm in Wellington North, 50 kilometres from Dubbo. (The Aus)

Policy

Australia and New Zealand agreed to co-invest in upgrades to the joint Equipment Energy Efficiency (E3) Program to reduce costs for industry and unlock cheaper household appliances. A joint statement issued after talks across the ditch also committed to aligning regulatory settings for consumer energy technologies, including a joint approach on requiring EV chargers to have smart functionality and align vehicle-to-grid charging standards, and support for Pacific ambitions to accelerate renewable energy, including by collaborating on a project under the Australia-Pacific Partnership for Energy Transition.

Intervention to get discounted gas to struggling manufacturers is under consideration to complement an east coast gas reservation scheme, SMH reported. “The priority now is getting a simple, workable model in place urgently – not designing some elaborate credit trading system that the gas companies will find ways to exploit,” the Australian Workers’ Union (AWU) has said, calling for a model that applies to existing projects, not just future ones. “We'll have discussions this week, next week, we'll make an announcement before the end of the year,” Prime Minister Anthony Albanese told ABC’s Insiders.

NT Energy Minister Gerard Maley said the territory government was working to protect power supplies after Tropical Cyclone Fina damaged an offshore platform. The production from Italian energy company Eni remains offline because of damage to the Blacktip platform near Wadeye. Japanese oil and gas giant Inpex has increased gas supply to help stabilise the system, Maley said in a statement, using the threat of blackouts as an opportunity to make a plug for Beetaloo which has enough gas to power Australia for 200 years. (AAP)

Technology

Octopus Energy’s Kraken is eyeing a US$15 billion valuation after a new US$500 million funding push. Kraken’s machine-learning tools help utilities manage increasingly complex power grids as EVs, home batteries, rooftop solar and heat pumps scale across households. Origin Energy’s (ASX: ORG) stake in Octopus puts it in line for a significant windfall, with Octopus preparing to spin off the fast-growing tech platform. (Yahoo Finance) (Bloomberg)

Climate

Politicians in southeast Asia ignore deadly climate change at their own political peril as global warming supercharges monsoon rains and cyclones. (ABC)

Research

The main barriers preventing people from entering energy-related training include costs, foregone wages and limited awareness of available programs, according to an IEA energy employment report. Since 2019, 5.4 million energy workers have been added or about 2.4% of all new jobs globally, but the contribution is larger in some countries at one in five new jobs in China since 2022 and one in ten in the US.

What's On

December 8
The Energy Charter CEO Council Forum

SA Power Networks CEO Andrew Bills will join Essential Energy CEO John Cleland, EnergyAustralia CEO Mark Collette, Energy Charter CEO Sabiene Heindl and AusNet Services CEO David Smales at this online event on “delivering better customer + community outcomes”.

December 9, Sydney and December 11, Melbourne
Energy Tetris

The Energy’s first live event will feature Quinbrook CEO Brian Restall, Energy Security Corporation CEO Paul Peters, Southerly Ten Chief Development Officer Erin Coldham, Hydro Tasmania Chairman Richard Bolt, Westwind Managing Director Tobias Geiger, Atmos Renewables GM of Development Allison Hawke, RWE Renewables APAC Head of Regulatory Affairs Matthew Dickie, ASL GM System Planning & Financial Markets, Melanie Koerner, UNSW Associate Professor Iain MacGill and Senior Research Associate Dylan McConnell and Energy Edge MD Josh Stabler.

December 15
AEMC Public Forum: The pricing review

The Australian Energy Market Commission will host an online forum on its draft recommendations for the pricing review.

December 17
AER Public Forum: AusNet Transmission Revenue Proposal 2027-32

The Australian Energy Regulator will host an online public forum for stakeholders to ask questions about AusNet's 2027-32 transmission revenue proposal.

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The Energy

Tapping into China's know-how