In an address given at the Economic and Social Outlook Conference in Melbourne on 2 November, Treasurer of Australia, Jim Chalmers, outlined five new perspectives on energy and Australia’s renewables transition.
Mr Chalmers said that the five main points he set out in his speech regarding the energy transformation come from his perspective as Treasurer.
Mr Chalmers’s first point was that while Australia has abundant natural access to renewable energy sources, which give the nation major advantages in the global energy transition, much more decisive action must be taken across all levels of government in order to take advantage of these opportunities.
“To maximise our advantages in renewable energy and the economic and industrial opportunities that will come from them, we need to get more projects off the ground faster,” Mr Chalmers said.
“After a wasted decade, we’ve made some really important progress – $20 billion fund for transmission through Rewiring the Nation, with $16 billion worth of deals already done.”
Mr Chalmers said that despite this progress, further action is required to meet Australia’s targets, and ensure affordability, reliability and emissions reductions.
“To get to net zero we have to deliver five major transmission projects by 2030 and expand the NEM’s current storage capacity to more than ten times its current size by 2050.
“Those are big numbers.”
Mr Chalmers said that his second area of focus was the enormous amounts of public and private capital required to drive the necessary work.
“That’s obviously critical, with $225 billion in additional investment required by 2050 across energy and industry, by some estimates.
“But we also know this; just pumping capital into the transformation won’t be enough if we don’t address skill shortages in the energy sector, if technologies remain untested at commercial scale, if we don’t properly plan for critical infrastructure, and ensure supply chains are robust, and if complex, cumbersome regulation continues to cut across our Federation, creating bottlenecks for clean energy projects.
“That’s why we’ve got a detailed policy agenda to address these barriers and get more projects off the ground.”
Mr Chalmers’s third point was the necessity of initiatives, incentives and other government actions that will support the industry, and the importance of such action being specifically tailored to Australia.
“We need a set of prescriptions right for this transformation and right for this country.
“We will complement, not copy, the priorities and plans of other nations, not just do exactly the same kind of investment with the exact same subsidies.
“We won’t realise Australia’s unique geographical, geological, geopolitical, intellectual and meteorological advantages by designing an ‘Inflation Reduction Act Lite’ – looking only for big numbers but missing the bigger picture.
“Our plan will be ambitious, but uniquely Australian.”
Mr Chalmers’s fourth focal point was that Australia’s industry policy framework needs to be recast and modernised in order to maximise the nation’s advantages and leverage its strengths.
“Our focus is on the development of industries that diversify our economy and make Australia more competitive in global markets, in an enduring and sustainable way – by being mindful of where those opportunities are being created, what they mean for workers, how they impact our domestic resilience and national security in a complicated geopolitical environment, and how they contribute to our climate and energy objectives.
“Balancing up all these considerations successfully – competitiveness, distribution of opportunity, resilience and national security, all anchored to our climate and energy goals – is our new industry policy approach for net zero.”
Mr Chalmers’s fifth and final point was that the Productivity Commission will need to be refocused so that it can play a bigger, more constructive role when it comes to climate and energy policy.
“This policy framework and the initiatives that have come from it will provide direction, but we will adapt them as we go.
“We will rely on the best analysis, and the best advice possible to help us.
“This is a key motivation behind my efforts to reform, refocus and revitalise our key economic institutions, including a new, more influential, more constructive role for the Productivity Commission.”
As part of his address, Mr Chalmers announced the release of the first Statement of Expectations for the Productivity Commission in its 25-year history.
“It will make clear that guiding our country towards a successful net zero transformation will be one of the key focus areas for a revamped and renewed Productivity Commission.
“More practical and relevant advice will complement that of other key institutions, like the Climate Change Authority, to ensure we realise the economic potential presented by the net zero transition.
“We want more practical and relevant advice here as a priority, so that we can secure the productive and prosperous transformation of our economy.”