Written by: Anthony Arrow, Pinsent Masons, Out-Law.com
ANALYSIS: The Liberal-National coalition was returned to power over the weekend for a third term and now has an opportunity to implement policies designed to decarbonise the Australian economy
Participants in Australia’s renewable energy industry have been craving a period of consistency and regulatory certainty at the federal level. There is certainly no shortage of projects ready to come to market; nor any problem with liquidity in funding such projects. A majority federal government has a genuine opportunity to encourage and foster the decarbonisation of the Australian economy.
The Scott Morrison-led coalition government has promised to support the growth of renewable energy to one-third of Australia’s electricity supply by the early 2020s, up from the current 21%.
So far, the coalition has set aside A$1.38 billion to expand the pumping and storage capacity of the Snowy Mountains Hydro Scheme, which will improve its ability to generate hydro electricity on-demand.
The coalition has also allocated A$86 million towards the Battery of the Nation Project, which allows hydro energy from Tasmania to be stored before it is transmitted to mainland Australia via an underwater cable.
While the government has only committed to pumped hydro storage projects in its A$3.5 billion Climate Solutions Package, state and territory governments are driving Australia’s transition from fossil fuels to renewable energy, with Tasmania, South Australia and the ACT leading the way.
The share of renewable energy in the national grid is expected to climb with more independents pushing for action on climate change and Australia’s obligation to cut emissions under the Paris Agreement.
To increase competition and electricity supply, the coalition government has not ruled out investment in coal-fired power plants. The Underwriting New Generation Investments program allows the government to underwrite new coal-fired power plants and life extensions of existing coal-fired generators.
Last month, the coalition scored 4% in a ‘green scorecard’ produced by the Australian Conservation Foundation (ACF) based on its lack of policies for large-scale solar and wind projects. The score also accounts for the absence of a commitment to nature conservation and phasing out coal.
Despite the coalition’s lukewarm support for large-scale solar and wind projects, Australia’s renewable energy market remains strong with continued interest from developers, contractors and investors.
Pursuing renewable energy opportunities will help Australia meet its Paris Agreement obligation to achieve a 26-28% emissions reduction below 2005 levels by 2030.