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Hey Reader, in today's edition:
- Hard work just beginning on planning reforms
- Downward pressure on reliability standard
- Warning from Australia's climate tsar
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Deal brokered for more sustainable development
More than five years after a landmark review found Australia’s environmental laws were broken, and an aborted attempt at changes during the Albanese government’s first term, parliament has agreed to a package of environment protection law reforms.
But the hard work has just begun, with new standards and other regulations yet to be made and an array of future bilateral deals with states also bringing a new set of unknowns.
“Our sector exists because of the need to protect our environment, and not in spite of it. We look forward to working in a more streamlined way in delivering the clean energy rollout in the national interest.
The CEC has long-advocated for modernising Australia’s environmental laws, however, the hard work continues from here to implement these reforms and we encourage all states and territories to collaborate on its implementation.
Regional planning is a core part of this reform package with the establishment of Environment Information Australia and this will be key to supporting strong environmental outcomes.”
Clean Energy Council CEO Jackie Trad
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Expert view
“These reforms will support a system that is faster to yes and faster to no on the projects we need to build to tackle the biggest challenges we face. Renewable generation to replace legacy assets at the end of their life. Transmission projects that move power from where it’s made to where it’s used. Places for people to live. Data centres to power the new economy. Electrical workers want to build these things for the country, but we need to know where and when the work is.
The uncertainty created by the previous fragmented, confusing and ineffective regime was a handbrake on energy transition, housing builds and infrastructure delivery. It was not delivering for communities, it was not protecting nature, it was not creating jobs and it was not fit for purpose. Today’s reforms have set us in the right direction on these key questions and electrical workers welcome them.”
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Michael Wright
National Secretary, Electrical Trades Union of Australia
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Expert view
“While the legislation is a significant step forward, Farmers for Climate Action (FCA) had pushed for a climate trigger to be incorporated and we remain disappointed that this did not occur … It is absolutely critical that limiting climate pollution in line with the best available science is central to all assessment processes.”
FCA will also seek further clarity to understand changes to land clearing laws in Queensland and we note that a significant number of farmers across Australia are actively planting trees and restoring biodiversity on their properties. With the right policy settings, farmers can hold the key to implementing climate solutions and restoring nature.”
Obviously, every law requires real policing, and we’ll be watching to make sure the new Environmental Protection Agency has real teeth. A watchdog should do more than just watch.”
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Verity Morgan-Schmidt
CEO, Farmers for Climate Action
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Expert view
“While we are pleased to see the commitment to ‘net gain’ offsets which will help drive much-needed nature improvements, we are concerned that the potential benefits at scale that could be achieved are still going to be hampered by the government’s new ‘pay and go’ offset fund and the state-by-state inconsistencies that remain unresolved.
Every day we see the confusion and complexity of different offsetting rules and standards across every state and territory, lowering the bar for nature and also hindering productivity for developers — which is a missed opportunity in the EPBC reform.”
The Government needs to progress quickly with bilateral agreements with states and territories for offsets to create a nationally consistent framework and embed high standards such as net gain, like-for-like offsets and a consistent robust methodology.”
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Ian Rollins
Managing Director of biodiversity and heritage consultancy Niche
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What price reliability?
The level of supply interruptions deemed acceptable in the NEM could be doubled from 2028 after the expert panel tasked with setting guidelines for reliability acknowledged the large rise in costs required to deliver sufficient energy.
Pointing to the increasing cost of building new gas-fired generation for backup, along with a decline in the value customers place on reliability, the Reliability Panel recommended a relaxation of the reliability standard to a range of 0.002% to 0.004%, which at the higher end would equate to approximately 21 minutes of outages per customer per year.
There have been no actual unserved energy events caused by resource inadequacy in the last five years, but the review comes as the sector finds it increasingly difficult to predict underlying demand as commercial and industrial users transition and households embrace batteries and rooftop solar.
“Analysis shows that customers now value reliability differently than they did four years ago, while the costs to provide that reliability have changed significantly,” Reliability Panel chair Rainer Korte said. The latest data from the Australian Energy Regulator showed the value customers place on reliability had dropped by an average of 18% across all regions.
The Panel recommended market price settings, including the market floor price and administered price cap, stay as is, but left open for input the market price cap (MPC), which is due to rise incrementally to $22,800 by 2027.
Consumer advocates have argued the increase of consumer energy resources should allow the MPC to be lowered and that measures expected from the NEM review could provide an alternative to high wholesale prices to encourage investment in new generation or storage. But generators say the NEM review measures should complement, not replace the current reliability settings framework.
Feedback on the draft is due January 29.
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Expert view
“The fact the Panel has related the standard to individual consumers in potential minutes of power loss per year, rather than just an esoteric figure (0.003% chance) for the collective, is part of a welcome shift towards thinking about reliability from the perspective of individual businesses, households and consumers.
On the market price cap, the higher it goes, the less effect it has, because a jump to an extremely high price (eg $100K/MWh) would mean it should occur so very rarely that this price, as an opportunity, has an imperceptible impact on an investor's decision making.
The market price cap may still have some way to go to enable a 100% renewables grid, but if gas turbine costs are expected to continue to contribute to its rise then the business case for long-duration storage looks increasingly better versus 10 years ago, when it was almost no contest.”
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Greg Williams
Energy economist
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Warning from Australia's climate tsar
The electricity and energy sectors have made the fastest gains on emissions reduction, improving the prospects for other sectors of the economy to decarbonise as they electrify, according to a climate update tabled in federal parliament.
“That sector’s contribution will expand as more renewable energy sources are switched on when ageing coal-fired power plants bow out,” Climate Change Authority Chair Matt Kean said. “To lock in these gains and near-term targets, wind generation must grow rapidly, supported by faster approvals and benefit-sharing with communities.”
Australia’s emissions fell by 10 million tonnes of carbon-dioxide equivalent (tCO2-e) in the year to June 2025, faster than the average over the past five years of 8 million tCO2-e reductions, the independent authority’s fourth Annual Progress Report found.
But the pace must double to achieve the legislated 2030 target of reducing 2005-level carbon pollution by 43%. To reach the new 2035 goal – a 62-70% reduction in emissions – the national rate of emissions reduction will need to triple by the early 2030s.
“That means speeding up approvals for clean energy projects and infrastructure to keep pace with the transition. Fortunately, the ongoing plunge in the price of solar photovoltaics and lithium batteries – combined with government policies like the Capacity Investment Scheme and measures to strengthen electricity security – is driving fresh demand at the household, business and utility scale.”
Climate Change Authority Chair Matt Kean
The authority made seven recommendations for priority action:
- streamlining approvals for renewable energy projects
- extending the Capacity Investment Scheme to maintain momentum
- installing technologies that keep the electricity grid secure as fossil fuel generators retire
- ensuring regional communities share in the benefits of clean energy projects
- taking a deep look at opportunities to radically reduce fossil methane emissions
- making sure Australians are not locked into living and working in places exposed to dangerous climate risks
- partnering with investors to help communities and businesses build resilience.
“The report also points to the need for a stronger carbon price signal. From ASFI’s perspective, that means using the Safeguard Mechanism review process next year to do that, reducing reliance on offsets, and ensuring emissions continue to reduce over time.”
Kristy Graham, CEO of the Australian Sustainable Finance Institute
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How energy links us all
In this episode of The Energy Connection Aurecon’s Paul Gleeson speaks with climate and labour rights advocate Sharan Burrow, and consumer advocate Gavin Dufty on the human impact of the energy transition.
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Policy
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WA Premier Roger Cook released a Strategic Industrial Lands (SIL) Activation Plan for the development of and investment in industrial land, including the opportunities for the state to get out of government-owned coal-fired power generation faster than any other Australian jurisdiction and support major trading partners to decarbonise by producing critical minerals and clean downstream products such as green iron. To date, $250 million has been allocated through a $1 billion Strategic Industries Fund (SIF). Funding will also assist with acquiring land and undertaking civil works to establish an industrial lot for building poles and wires locally, in Picton. Cook said the facility would be a significant contributor to the state's economic future in the South West, alongside the Coolangatta Industrial Estate in Collie.
Malcolm Turnbull sledged his former colleagues for "insane conversations" around climate and energy — seven years on from him being prime minister — while unveiling his official portrait at Parliament House. "Energy policy should be made by engineering and economics, not ideology and idiocy,” he said. (AAP)
Regulation
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The Clean Energy Regulator’s September quarter carbon market report said the Cheaper Home Batteries Program had “exceeded expectations”, with around 175,000 valid battery applications corresponding to a total usable capacity of 3.9GWh expected to be received by the end of 2025 — more capacity than the five biggest utility-scale batteries operational in the National Electricity Market (NEM). A staggering 6GWh of storage capacity could be installed under the scheme by the end of the 2025-26 financial year. Renewable energy capacity being added to the grid is also strong, the regulator said, expecting final investment decision (FID) announcements to strengthen over 2026 after this year’s retreat.
Victoria’s Essential Services Commission is revoking the Public Lighting Code as of December 31. Key rules included how electricity distributors connect and work with councils and VicRoads, but most of the obligations are now duplicated in national and other state regulations. Obligations not duplicated will be transferred to the Electricity Distribution Code of Practice (EDCoP). Electricity distributors were reminded that the standards remain enforceable, and meeting these standards is important for public safety.
Technology
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The Australian Energy Market Operator (AEMO) released findings from the first stages of trials of a new method to get renewable energy projects connected to the grid faster, more reliably, with fewer technical and project schedule risks. Known as ‘frequency scanning’, the method found oscillations associated with Inverter-Based Resources (IBR) design can be easily identified early in the generator connections process, connecting parties can design IBR controllers to reduce the risk of oscillations at a specific network location without access to restricted NEM-wide models, and the approach uses existing Electromagnetic Transient (PSCADTM) models without exposing OEMs to additional intellectual property risk.
Research
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More than half of US companies’ self-reported greenhouse gas emissions were revised — mostly upwards — in subsequent reports, finds an analysis of corporate social responsibility documents. For example, American Tower Corporation, a developer and operator of wireless and broadband infrastructure, reported emissions equivalent to 596,969 tonnes of CO2 (tCO2-e) in 2020. This 2020 figure was revised without explanation in both the 2021 and 2022 reports, increasing to 662,428 tCO2-e. The revisions “do not necessarily reflect nefarious behaviour,” write the researchers, but they do provide “compelling justification for stronger regulatory intervention.” (Nature Climate Change)
Random
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Barnaby Joyce quit the Nationals and is “strongly considering” joining One Nation, confirming he will not contest the next election as the member for New England but holding the door open to a Senate run. (The Australian) (Guardian)
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What's On
December 5
Keeping the lights on - syncons vs batteries
Mark Twidell, Industry Professor of Practice at the UNSW Energy Institute, and Transgrid Executive General Manager of Network Jason Krstanoski will speak at this webinar from The Energy, moderated by UNSW Energy Institute CEO Dani Alexander.
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 17
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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