Federal Treasurer Josh Frydenberg has delivered the 2020-21 Budget, with almost $2.5 billion allocated to the energy industry; and the gas sector earmarked to play a pivotal role in one of the key features of the Budget, the Modern Manufacturing Initiative.
Federal Minister for Energy and Emissions Reduction, the Hon Angus Taylor MP, said “Our 2020-21 Budget initiatives will help to lock in lower energy prices while simultaneously developing the backbone of a reliable, lower emissions National Electricity Market (NEM) for the next decade and beyond.
“As we rebuild from the COVID-19 pandemic, the Government will also accelerate the development of low emission technologies to help reduce emissions, strengthen energy security and support jobs.”
Specific initiatives announced for the energy industry for the 2020-21 period include:
- Up to $250 million to accelerate major transmission projects such as Marinus Link, Project EnergyConnect and VNI West to the next stage. Together with existing support for HumeLink and the QNI Interconnector, this means all priority transmission projects are being accelerated, creating thousands of new jobs, putting downward pressure on prices and shoring up the reliability of the grid.
- A $53.6 million microgrid program to support the development of pilot projects in regional Australia, building on the success of the current Regional and Remote Communities Reliability Fund. This will help deliver more affordable reliable power in regional communities across Australia.
- Helping connect the North West Minerals Province (NWMP) near Mount Isa to the NEM through further support for the CopperString high voltage transmission line. This will allow major users in the NWMP to access reliable and more affordable energy supply, and encourage further investment in mining and processing in the region.
- $28.5 million to deliver cheap and reliable energy to Western Australians through the South West Interconnected System Big Battery project and a WA-based microgrids program for remote and indigenous communities.
- $52.2 million to improve energy efficiency, lower bills and deliver abatement, including $24 million to fund building upgrades and reduce energy costs for community groups and for small and medium hotels.
- $4.9 million over two years to improve cyber security in the energy sector and prepare government and industry for future threats.
The Government is also strengthening Australia’s long-term fuel security through a $250.7 million investment in new diesel fuel storage facilities and progressing reforms to boost the resilience of fuel supply and support local refineries.
This will create up to 1,000 new jobs, increase our diesel stockholdings by 40 per cent, and contribute towards our International Energy Agency (IEA) obligation while also protecting Australian motorists from higher prices at the pump.
Gas is set to play a huge role in the Federal Government’s economic recovery plans, with the announcement of an inaugural National Gas Infrastructure Plan (NGIP) to identify priority infrastructure projects, and options to boost the Wallumbilla Hub into a more transparent Australian Gas Hub, like the Henry Hub in the United States.
On top of the $42 million of investments to unlock supply, $10.9 million will be invested to strengthen gas infrastructure planning and deliver market reform to lower the price of gas for households and manufacturers.
Gas will also play a critical role in the $1.3 billion Modern Manufacturing plan, which will target six national manufacturing priorities:
- Food and beverage manufacturing
- Resources technology and critical minerals processing
- Medical products
- Recycling and clean energy
- Defence industry
- Space industry
The backbone of this plan is enabling Australian manufacturing businesses to be globally competitive through cheaper and more reliable energy.
To that end, the Federal Government is helping to unlock five key gas basins starting with the Beetaloo Basin in the Northern Territory and the North Bowen and Galilee Basins in Queensland.
In his Budget speech in Federal Parliament, Treasurer Josh Frydenberg said, “More gas at a lower price will support jobs in Australia’s manufacturing sector.
“Affordable and reliable energy will be critical to Australia’s future economic prosperity.”
The Budget also sets out measures that demonstrate how the Government is reducing emissions through technology, including:
- $1.4 billion over ten years for the Australian Renewable Energy Agency to support the Government’s Technology Investment Roadmap, by accelerating the development of new and emerging technologies to reduce emissions.
- $70.2 million over five years to activate Australia’s first regional hydrogen export hub and facilitate research collaborations and international supply chain studies to boost Australia’s hydrogen industry.
- $95.4 million for a Technology Co-Investment Fund to implement recommendations from the King Review to support businesses in the manufacturing, industrial, transport and land sectors to invest in low emissions technologies to unlock energy and emissions savings and create jobs.
- $50 million investment in the Carbon Capture Use and Storage Development Fund to pilot carbon capture projects that will help dramatically cut emissions from large industrial facilities.
- $74.5 million over four years to enable Australian consumers and businesses to adopt future fuel and vehicle technologies in Australia, including hydrogen, electric, and bio-fuelled vehicles.
- $45.2 million for the Government to progress reforms to make it easier and cheaper for business to participate in the Emissions Reduction Fund, and to support investment in offshore clean energy generation and transmission.
The budget has been met with mixed reaction from energy industry groups.
More to come.