Joint media release: Energy future plan

The Hon Chris Bowen MP, Minister for Climate Change and Energy
Senator Jenny McAllister, Assistant Minister for Climate Change and Energy

The Albanese Government is taking action to ensure Australia is positioned to become a renewable energy superpower, with the 2023-24 Budget funding critical investments to save Australians on their energy bills and invest in nation-building new industries.

For too long, Australians were left behind as the rest of the world moved to take advantage of the economic opportunities that come with action on cleaner, cheaper energy.

In the global race for new energy jobs and investment, we were falling behind the pack.

Our regions need to be supported to harness their immense potential, build new industries and create jobs – because the regions that power Australia today will be the regions that power Australia tomorrow.

That’s why, in addition to targeted household rebates to provide energy bill relief, this Budget is funding a plan to ensure households and communities can take advantage of the savings from smarter energy use, and ensures our nation is prepared to capitalise on the global boom in clean energy investment.

Save energy, save on bills

Households and businesses will be able to access energy upgrades to improve their energy use and save on their energy costs, with a $1.6 billion Energy Savings Plan.

Australian homes are largely inefficient - Australia ranks 58th out of 63 countries on energy use per capita. Upgrading an average house from a 1-star rating to a 3-star rating can cut a household’s energy bill by around 30 per cent.

As part of this package:

  • $1.3 billion will be invested to establish the Household Energy Upgrades Fund. This fund will provide $1 billion to the Clean Energy Finance Corporation (CEFC) to turbocharge financing options for household energy upgrades – partnering with banks and other lenders on upgrading homes with battery-ready solar PV, modern appliances and other improvements to keep them warmer in winter and cooler in summer. This will help more than 110,000 households lower their energy bills.
  • The Fund will also includes $300 million to support upgrades to social housing ,cofunded and co-designed with the states and territories. As most social housing was built over 20 years ago, before minimum build standards, the energy efficiency of most social housing is amongst the lowest in Australia. These are the Australians who can’t afford – and would benefit most – from energy upgrades. It’s estimated that once implemented, around 60,000 social housing properties will save up to one-third of their energy consumption from upgrades each year.
  • $310 million in tax relief will be delivered via the Small Business Energy Incentive, to provide businesses with annual turnover of less than $50 million with an additional 20 per cent deduction on spending that supports electrification and more efficient use of energy. The bonus tax deduction will be available for up to $100,000 of total eligible expenditure (with the bonus tax deduction being $20,000). Up to 3.8 million small and medium sized businesses will have access to the new tax incentive from 1 July 2023 to 30 June 2024, to help unlock energy savings.

Becoming a world-leading hydrogen producer

Renewable hydrogen is a critical enabler for future manufacturing of green metals and other products the world needs as the transformation to net zero by 2050 gathers pace.

In this Budget, we are investing:

  • $2 billion for Hydrogen Headstart, providing revenue support for large-scale renewable hydrogen projects through competitive hydrogen production contracts. These will help bridge the commercial gap for early projects and put Australia on course for up to a gigawatt of electrolyser capacity by 2030 through two to three flagship projects. This investment will build critical domestic experience and expertise, and position Australia to take advantage of the immense jobs and investment potential of the technology.
  • $38.2 million for a Guarantee of Origin scheme, which will certify renewable energy and track and verify emissions from clean energy products – in particular hydrogen. This is critical funding to ensure Australia is seen as an attractive investment destination, to accelerate investment in an Australian hydrogen industry and to support access to future markets for verified renewable and clean products. 

Importantly, the Government will also provide $5.6 million for further work before the end of 2023 on the best ways to leverage Australia’s competitive strengths in renewable energy, critical minerals and highly skilled workforce to accelerate our other clean industrial and manufacturing capabilities.

National Net Zero Authority

The Albanese Government will legislate a national Net Zero Authority to ensure the workers, industries and communities that have powered Australia for generations, can seize the opportunities of Australia’s net zero transformation.

The Authority will have responsibility for promoting the orderly and positive economic transformation associated with achieving net zero emissions.

The new, legislated Net Zero Authority will:

  • Support workers in emissions-intensive sectors to access new employment, skills and support as the net zero transformation continues.
  • Coordinate programs and policies across government to support regions and communities to attract and take advantage of new clean energy industries and set those industries up for success.
  • Help investors and companies to engage with net zero transformation opportunities. 

The 2023-24 Budget also funds critical nation-building initiatives:

  • The Capacity Investment Scheme. Following unanimous agreement with the states and territories, this Budget provides funding for the initial auctions of the Capacity Investment Scheme – with the Commonwealth underwriting investment which will bring on new supply of clean, dispatchable power across the country. Funding for these auctions is not for publication due to commercial sensitivities.
  • Powering the Regions Fund. To continue to support Australia’s regions in a decarbonising economy, the Government has allocated:
             o $600 million to the Safeguard Transformation Stream to assist trade-exposed safeguard facilities.
             o $400 million to the Critical Inputs to Clean Energy Industries stream supporting primary steel, cement, lime, aluminium and alumina industries; and
             o $400 million to the Industrial Transformation Stream to be administered by ARENA, supporting regional industrial facilities, including rail and aviation, and helping support new clean energy industries.

We won’t achieve our emissions reduction goals unless we secure them from and with our biggest emitters, and this support is critical to further incentivising necessary investment across the economy.

In recognition that the impacts of climate change are already being experienced by communities across the country, including more very hot days, more intense rain fall, and warmer averages, the Budget will fund the first ever National Climate Risk Assessment to help Australia adapt in a changing world.

The Government’s Energy Future Plan will reduce pressure on power bills and cut emissions. It will support workers in existing industries and ensure we are attracting jobs and investment in new industries. And critically, it will set Australia up as a renewable energy powerhouse for jobs, exports and growth.