Remarks to the 2020 CEC Clean Energy Ministerial Forum
8 July 2020
Subject: Renewable energy, investment, Grid Reliability Fund, Emissions Reduction Fund, hydrogen
Fellow ministers and Clean Energy Council members, thank you for the opportunity to deliver this address via video today.
It has been a difficult time for many in the energy sector over the last few months. We have been working closely with industry and state and territory governments to ensure the lights stay on for all Australian businesses and households. I thank everyone who has been involved in this process so far.
Despite these challenges, I am pleased that Australia continues to be strong in its performance in 2019 and remains a world leader in renewable energy investment.
Last year, Australia’s investment per person was greater than the US, Japan and the UK, and more than three times that of Germany, China, France and Denmark.
The Clean Energy Regulator reports that 6.3 gigawatts of new renewable capacity was installed in 2019, which is 24 per cent above the 5.1 gigawatts recorded in 2018.
Claims that we are falling behind on our previous renewables records ignores the impact of our rooftop solar growth.
Our Small-Scale Renewable Energy scheme continues to drive our high uptake rate of rooftop solar. Almost one in four Australian households now have a solar system that can help them reduce their energy bills.
Similar levels to last year are expected for 2020, with large-scale project installations on track to achieve 3.4 gigawatts and small-scale solar tracking towards around 2.7 gigawatts.
The rooftop solar sector is currently delivering increased capacity of 33 per cent year on year, with the Clean Energy Regulator not detecting any slowdown as of May.
Despite the economic downturn triggered by COVID-19, the renewables industry has performed well.
This is backed by the CEC’s own Clean Energy Outlook which shows that in July 2020, despite the global pandemic, investment confidence is at its highest level since records began in 2018, at 7.3 out of 10.
New projects are being announced and progressed towards final investment decisions.
The Clean Energy Regulator is tracking around 2.3 gigawatts of projects yet to be committed, but are still expected to proceed. This is a really good sign for the sector.
We are also continuing to develop the regulatory framework to allow offshore clean energy projects to be established in Commonwealth waters.
This framework will provide a fair and transparent process for the development of offshore renewable energy projects, including wind and wave technologies, and transmission infrastructure.
This will provide the certainty that industry needs to secure investment and begin to establish this sector in Australia.
This is all positive news.
However, with Australia being a world leader in renewable technologies and investment confidence being at high levels, we must work to balance our growing intermittent energy sources with firmed generation to keep prices down and keep the lights on.
Increasing penetration of variable renewables can put downward pressure on prices, but they’re not always available when the system needs them most.
That is why the Government is continuing to support new investment in the energy sector through mechanisms like the Underwriting New Generation Investments program, the $1 billion Grid Reliability Fund, MarinusLink and through the delivery of Snowy 2.0.
These investments, and the Grid Reliability Fund in particular, should be welcome news to CEC members.
I’d also like to thank CEC members for the contributions so many have made to the Technology Investment Roadmap consultation process.
As we recover from COVID-19, the Government is committed to reducing emissions without imposing new costs on households, businesses or the economy.
We are taking a ‘technology not taxes’ approach to reducing emissions.
I want to see low emissions technologies reach cost parity with incumbent technologies, with Australian businesses and consumers free to make their own technology choices.
The first, annual Low Emissions Technology Statement will be released later this year - informed by advice from industry, investment, government and research leaders, including Australia’s Chief Scientist.
The Statement will inform the priorities of our key delivery agencies including ARENA, the CEFC and Clean Energy Regulator.
Integration of variable renewables through storage, transmission and other enabling technologies will be critical if we are to deliver on our commitment to affordable and reliable energy for Australian families and businesses as we bring down our emissions.
When it comes to technically and commercially proven technologies, the Government will continue to incentivise voluntary emissions reductions on a broad scale through the $2 billion Climate Solutions Fund.
In May, the Government released its response to the report of the Expert Panel, led by Mr Grant King, which looked at ways to unlock low cost abatement across the economy.
We agreed to their key recommendations, including to encourage greater participation in the Emissions Reduction Fund and incentivise voluntary emissions reduction on a broader scale.
There’s no doubt the ERF has been a success, but there are considerable untapped opportunities across the economy – especially in agriculture, transport and industry sectors.
Implementation of the King Review’s recommendations has already begun and we will look to support increased private co-investment to drive down the costs of transformative technologies and accelerate their uptake.
We already know industry are keen to get involved with our technology-driven approach.
For example, ARENA’s $70 million Renewable Hydrogen Development Round received 36 expressions of interest seeking more than $1 billion in grant funding towards projects with a total value of over $3 billion.
This will go a long way to reaching our first stretch goal from the Technology Investment Roadmap of ‘H2 under $2’ – where hydrogen becomes cost competitive with current competitors in widespread deployment.
I want to thank the Clean Energy Council for hosting this forum and thank my ministerial counterparts for your continued work and collaboration with the Commonwealth on investment in clean energy technologies.