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Hey Reader, in today's edition:
- Energy crisis distracts
- California hopeful
- Call for consumer pricing reset
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Bowen sidesteps energy policy questions
Climate Action Week kicked off in Sydney yesterday morning amid a now-familiar geopolitical backdrop — a global energy crisis that threatens to distract and derail progress on climate and the energy transition.
Fronting reporters before his ministerial address, Climate Change and Energy Minister Chris Bowen downplayed frenzied questions about diesel supplies being inadequate for farmers in regional Australia, seeking to assure the public that the country’s diesel and petrol fuel reserves could withstand a protracted Strait of Hormuz closure.
Bowen was quick to talk up the success of the Cheaper Home Batteries Program, which has notched 265,000 installations since being introduced in late 2024, and of the EV tax discount, which has boosted EV sales.
But he neatly sidestepped more pressing questions of whether the higher inflationary and less certain economic outlook might preclude big-ticket energy policy action in the upcoming May Budget.
He did not confirm whether the home batteries scheme — which in December was plumped up by $5 billion to $7.2 billion — would be retained or altered. He did not say whether the government would scrap or retain the EV tax discount, which is currently under review, with no confirmed date for tabling a final report.
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Keeping calm and getting on with it
Also at Climate Action Week, California Energy Commission (CEC) chair David Hochschild joined a diverse group of climate leaders for a panel discussion with a touch of optimism.
Hochschild had some philosophical advice for Australian climate leaders struggling to make sense of recent US climate policy backflips. “My wife reminded me of this beautiful quote, which is something to the effect of: ‘Don’t seek to dismantle old paradigms, create new paradigms that, by virtue of their success, make the old paradigms obsolete.’
“I think the operative word is create, and that’s what this place of gathering is all about, and that’s what we’re doing together. We’re in different countries and different continents, but we’re all on the same team in terms of creating a new clean energy economy that’s going to power our future.
“The good news is that the power to do that rests in the United States, largely with state [governments]. So in my home state of California, we’re about 70% clean energy on the grid, we have more EV charge plugs than gasoline nozzles, we’ve added about 17GW of energy storage in the last seven years.”
After the panel discussion, Hochschild sat down with The Energy’s Kate Burgess to discuss how California is getting busy electrifying while the Trump presidency rips up the climate policy playbook.
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Back to the drawing board on consumer pricing
The Australian Energy Market Commission’s self-initiated pricing review has ignited a firestorm over network charges.
Among the many questions the rule maker hasn't asked in its draft review, writes Ron Ben-David, is why do consumer-facing electricity prices contain a fixed charge in the first place?
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Expert view
"The AEMC’s draft report has emboldened one group of people and enraged another without offering a clear conceptual or evidentiary framework for resolving the argument.
The AEMC’s only response to the flare up has been to limply suggest a long (possibly ten-year) transition to higher fixed charges.
A long transition will certainly help avoid bill shock for the most affected customers, and that is probably good, but it leaves consumers waiting for ten years for the outcome the AEMC considers to be most equitable. That’s a very long time to ask consumers to wait. Across the country there could be over 20 elections in that time.
Worse still, where does a ten-year phase-in leave the DER versus electrification debate? For most of the ten-year transition period, price signals will be mathematically watered down to produce a mélange of tariffs that serve neither objective."
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Ron Ben-David
Professorial Fellow, Monash Business School
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Capital
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The ASX lost nearly $120 billion in value and Australian three-year government bonds surged to 4.58% as exploding prices for crude oil – which have surged to more than US$100 per barrel since the Iran conflict began nine days ago – increased expectations of interest rate hikes. Global markets are set for further disruption after Qatar’s energy minister warned that prices could hit US$150 per barrel given gulf states would stop exporting energy altogether within days. (AFR)
The NSW Government is offering two $40 million grant programs as part of its new Industrial Decarbonisation Initiative, which is designed to help industries shrink their carbon footprints and accelerate the transition. The new $40 million Renewable Gas Production Program will fund up to half of the costs of developing commercially viable systems for boosting production of biomethane gas from organic waste, while the new $40 million Low Emissions Industry Program will help NSW manufacturing and mining interests to implement carbon reduction projects including fuel switching, heat pump installations, facility retrofits and process improvements.
 Projects
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The Western Australian government is reportedly in advanced planning to build a new 300MW gas-fired power station in time for the closure of the state’s last coal-fired power station in 2029. Such a move is a “bizarre and backwards suggestion”, Greenpeace said, citing its own recent modelling suggesting that WA “does not need more gas”. WA energy minister Amber-Jade Sanderson would neither confirm nor deny the rumours, but opposition energy spokesman Steve Thomas has long been calling for 300MW of new generation capacity to fill in the “obvious” capacity gap. (The West Australian)
Regulation
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AEMO has lodged a rule change request with the AEMC to amend the National Electricity Rules with a principle that marginal loss factor (MLF) determinations consider the need for investment stability — including addressing “large annual swings” in the current methodology by adjusting AEMO’s MLF calculation procedure to reduce year-to-year volatility and investor risk.
Policy
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A $32.7 million funds injection will enable the expansion of the Nationwide House Energy Rating Scheme (NatHERS) — a “proven winner” for 30 years, as assistant minister for climate change and energy Josh Wilson put it, that has been focused on rating the energy efficiency of new homes — to encompass existing and energy upgrades as well. With 70% of Australia’s 11 million existing homes built before minimum energy efficiency standards were required, those properties have an average energy rating of just 3 stars. Increasing these to 5 stars could reduce the energy needed for heating and cooling by around 40%, Wilson said, reducing their energy consumption and allowing any solar PV generation to be more usefully redirected to local battery storage or the grid.
Faced with skyrocketing gas prices, Australia should introduce a windfall profit tax on opportunistic gas producers that capitalise upon the price surge, Grattan Institute energy and climate change senior fellow Tony Wood has argued in pushing for such a measure to become “an ongoing backstop in a world where destabilisation is the new norm.” Gas producers would be cleared for “commercially acceptable revenue on domestic sales” and left to price exports at whatever level they like. This would be a more responsive policy than the government’s proposed east coast gas reserves, with Wood noting that with supply and demand “both expected to move a lot over the next few years…. deciding the domestic market will get a fixed percentage of production is both arbitrary and static in a rapidly changing market.”
The booming registrations for the government’s Cheaper Home Batteries program saw 1.2GWh of home battery capacity registered through the program in February. Despite February being the shortest month, registrations jumped more than 10% from January in all states — and by 58% in Tasmania — and exceeded the previous record, in December, as buyers pushed to take advantage of current rebate levels before they are reduced on May 1. Rooftop solar also bounced back to record-setting territory. (PV Magazine)
Technology
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Chinese electric vehicle maker BYD has unveiled new batteries can charge from 10% to 70% in 5 minutes and from 10% to 97% in 9 minutes. BYD's chairman, Wang Chuanfu, said that the new 2nd-generation Blade Battery delivers a driving range of 777km. (PV Magazine)
Climate
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National retailer Kmart Group has achieved its 100% renewable energy target across its 448 Kmart and Target stores, 10 distribution centres, and 12 national and international offices, the group announced as it revealed it has cut total electricity use by 4.9% since 2021 despite adding 10 new stores in that time. Kmart has power purchase agreements with generators including NSW’s New England Solar Farm, Victoria’s Numurkah Solar Farm, SA’s Tailem Bend 2 Solar Farm, and Queensland’s Western Down Green Power Hub.
Research
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New Zealand’s progress towards its goal of 100% renewable electricity generation by 2030 means the country has no need for a new LNG import terminal, a new Victoria University of Wellington analysis has shown – with offshore wind projects crucial to smoothing supply through seasonal variations in hydro power reserves. (The Conversation)
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What's On
March 10
Orchestrating Consumer Energy Resources to Benefit Customers and Strengthen the Grid
AGL CEO Damien Nicks will keynote this Australian Energy Council event in Melbourne. Other speakers include AEMC Chair Anna Collyer and AEMO Executive General Manager, Policy & Corporate Affairs Violette Mouchaileh.
March 10
Balance the scales: Policy, markets and power
The Australian Institute of Energy will mark International Women’s Day with a morning session for members at Neoen in Sydney, where Neoen’s Megan Ward and Baringa Partners’ Jacqui Fenwick will talk policy, markets, and power. Details here.
March 10
Road to COP31: The Australia-Pacific opportunity
Australia’s ambassador for climate change, Will Nankervis, will headline an online IGCC Open Member Briefing session at 12:30pm in which he discusses Australia’s role as president for negotiations in this year’s COP31 meeting in Türkiye and the opportunities it poses to shape global and regional climate outcomes. Register here.
March 10
Road to COP31: The Australia-Pacific opportunity
Australia’s ambassador for climate change, Will Nankervis, will headline an online IGCC Open Member Briefing session at 12:30pm in which he discusses Australia’s role as president for negotiations in this year’s COP31 meeting in Türkiye and the opportunities it poses to shape global and regional climate outcomes. Register here.
March 12
Renewable Heat Adoption Challenge
Greenhouse is hosting presentations and 'matchmaking' for energy end users, solution providers and consultants who are focussed on decarbonising industrial heat. Speakers include Emma Peacock from the Australian Industrial Renewable Heat Accelerator, Cathy Inglis from Think Brick, Rick Umback from the Australian Food and Grocery Council and Tennant Reed from Australian Industry Group.
March 17-19
Energy Networks Australia Conference
Climate Change Authority Chair Matt Kean, Iberdrola Australia CEO Paul Simshauser and Airtrunk Founder Robin Khuda will keynote this event in Adelaide also featuring the leaders of Australia's energy network companies.
March 18-19
Energy Storage Australia
Speakers at this Sydney event include NEM review chair A/Prof Tim Nelson; Modo Energy’s Wendel Hortop; SolaX Power’s Wenyan Sharp; Indigenous Energy Australia’s Michael Frango, Hydro Tasmania’s Erin van Maanen, and the Energy Security Corporation’s Paul Peters.
March 19
Powering the future: Sustainability of mining energy transition materials
The Melbourne Energy Institute will welcome Monash University’s Dr Nikolas Kuschnig for a session exploring the sustainability of mining energy transition minerals. The one-hour session, starting at 2pm online and in person at the Melbourne Connect building in Carlton, will explore the lack of information about artisanal and small-scale mining (ASM) and the impact of uncertainty on the supply of metals critical for the energy transition.
March 24
Powering WA's Regions: Remote and Offshore Renewables
The Clean Energy Council will hold a panel session at Perth’s Golden Ballroom Centre, with speakers including Sabine Powell of DNV Australia, Vi Garrood of Horizon Power, Thomas Friberg of Zenith Energy, Emma van der Velde of GHD, and Nicole Blackburn of Schneider Electric (Australia).
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