Opening address, Australian Energy Week

I’m delighted to join you at this important conference on the lands of the  peoples of the Kulin Nation, whose elders I acknowledge and celebrate.  

I always think of this acknowledgement as a basic act of respect and courtesy.  

But respect and courtesy aren’t enough.    

We also need to engage in ongoing practical reconciliation and the drive to eradicate indigenous disadvantage.  

To me, the energy transformation is one of our best, if not the best, opportunity to do just that.  

To ensure that First Nations people benefit from and have some ownership of the wealth we will create as we re-engineer our energy system.  

We’ve delivered our First Nations Clean Energy Strategy which provides a better framework to allow that First Nations equity and engagement.  

The Strategy is important, but I don't pretend that it has as yet even started to work.    

Funding for much of the strategy begins on 1 July, in a few weeks' time.  

But funding is just the start.  We will need to work together, across our sector to make the strategy a reality. I look forward to doing so with you.  

Friends, this Conference is well timed.  Just over a month since the last election. And this is my first major speech of the second term of the Albanese Government.  

In that election, the Australian people instructed us to keep going in the energy transition.  

The former Leader of the Opposition said the last election was a referendum on energy, and on this we could agree.    

And the results of that referendum are clear: in uncertain times Australians want an affordable plan, backed by the experts.  

In the Hunter and Illawarra where we proposed offshore wind zones, we saw swings to Labor.  

Our beating industrial heartlands said: we accept the transition – keep going and get it done right.    

We saw the suburbs back us because they recognise that the rooftop solar powering one in three homes reflects the huge opportunity for households and for our energy system, and that the best is yet to come with the rollout of cheaper home batteries. 

Voters chose Labor to keep on delivering an Australian plan for an Australian grid.  

I do not take this endorsement for granted.  

There are plenty of challenges and headwinds to deal with.  

A major economic transformation like this doesn’t come easily or always smoothly.

Progress is hardly ever linear.  

Before me and the Government there is a challenge to deliver a fairer energy system, one that is modern and capitalises on our natural abundance, while delivering lower bills and emissions.    

We all, in this room, know how important it is.  

Getting this right is the key to our economic prosperity of our country.  

That’s why I was keen to stay in the same portfolio after the election, and was delighted when the Prime Minister asked me to keep going.  

I didn’t ask for this job because it’s easy. Or uncontroversial.  

We all know it is neither of those two things.  

I asked for the job because it is such a challenge and because it is so important.  

This brings me to you. 

The people in this room who are living and delivering this transformation every day. 

The people from across our energy sector who see the opportunities of the renewable transformation and are determined to seize them for our country.  

My message is simple: Thank you.  

Government is important.  Government is in fact vital. But Government is not enough.  

We need the private sector and the community engaged, investing, thinking, innovating, risking and employing.  

And I know you’re doing all that and more.  

Too often the efforts of those in this room dedicated to deliver our modern energy grid are dismissed.  

There are those who simply don’t believe in the project.    

They don’t accept the science of climate change or recognise the need, and opportunity, to act.  

They may no longer openly deny it, but instead they claim it’s all just too hard, too expensive, too impossible. I read a lot of this in the opinion pages of some of our newspapers.  

But likewise, there are those who claim not enough is happening. They diminish progress in the face of the inevitable challenges.  

Their denial of our momentum and ready willingness to seize on a day’s headline and ignore the years of progress, can be just as disheartening and dangerous to the cause.    

Denial, of the need for action or of the progress so far, doesn’t help Australia further along the transition. Denial is only useful for those who seek to stop the transition completely.    

What these commentators have in common is just that: they are commenting but people in this room are delivering.  

Commentating is easy. Sitting in the stalls like Statler and Waldorf in the Muppet show criticising others is not hard.  

What you are doing, what we are doing, is delivering the transition.    

As I said, sometimes we’d like it a bit smoother,  sometimes we’d like it a bit faster.  But we are dealing with headwinds and making progress.  

And so today, I want to give you an update on progress post election, to talk about the approach to the second term and to give you a report on some of our key delivery levers for the transition.  

Over the past three years there has been a massive acceleration of investment and deployment, with solar capacity and output up by around 50%.    

In our first term we saw over 15 GW of renewables added to the grid, this is more than three Snowy Hydro schemes worth of renewables.    

By continuing to reduce emissions in electricity, driving to 82% renewable energy, our projections show we can reduce emissions by more than half of what they are today by 2030.    

Without considering future reforms or the 2035 target, electricity emissions could halve again by 2040 under our projections.  

There was a lot of catching up to after the last decade, and I think this is a decent start in that process of catching up and moving forward.  

And it’s time to knuckle down and get on with the job of delivering a better, fairer, more reliable, more affordable and lower emissions energy system for Australians.  

Not an easy task, but an essential one.  

I want to talk about one of those elements now: a fairer energy system.  

This is important for two reasons in my view: firstly it is one of simple equity, our energy system should be as fair we can practically make it as matter of principle.  

And secondly in terms of community support.    

Australians aren’t going to continue to support our energy transformation if they don’t think our energy system is fair for them.  

That’s why we took to the election, and are now implementing, the Cheaper Home Batteries program for 1 July.  

While one in three homes have rooftop solar, only one in 40 have batteries. That abundant solar isn’t being harnessed as best it could – we're fixing that with 30% off the typical battery.  

This won’t just give solar homes a way to store their energy, it’ll help even out the grid, making the energy system fairer for all Australians.  

As 1 July approaches we’re getting final regulations in place and we will watch implementation closely, especially in the initial phases of the roll out. We can already see it’s a popular policy – the department website’s traffic has hit record highs of more than 114,000 views while battery sales are outpacing new solar systems for the first time ever.  

With this significant community demand it’s vital we get the settings right so retailers and installers adhere to their responsibilities to customers and under the law.  

It also means ensuring that households and businesses are receiving the batteries that meet their needs, and that the subsidy in the first year is maintained at the right level in the context of rapidly declining battery prices.  

We are also alert to opportunities to keep calibrating the policy so it delivers for households and the energy system, supported by an Industry Advisory Implementation Committee my agencies will convene in the coming weeks.  

If we need to make adjustments, we will.    

That’s just part of how we’re better protecting consumers and delivering our plan for households and the energy market.  

We are also pursuing a raft of rule changes to deliver better consumer protections, including by getting rid of unjustified fees, ensuring consumers get the discounts they’re entitled to, better assisting hardship customers, and making it much easier to switch offers.  

As it happens, the Australian Energy Market Commission will be issuing final determinations and rule changes for many of these rule changes tomorrow, and I look forward to that very much.  

These rule changes will deliver better protections for customers on a retail level.  

They are aimed at empowering and protecting consumers by resolving specific, systemic retail contract issues, such as addressing key elements of the ‘loyalty tax’, limiting the number of price increases and further addressing retail fees – especially for vulnerable consumers.  

For customers on a hardship plan, they will not be financially worse off if they do not take up a deemed better offer, and retailers will have to provide more transparency regarding their hardship customers.  

But there is much more work to do.  

Currently, the independent Australian Energy Regulator (AER) sets the Default Market Offer as a benchmark for residential and small business electricity bills in NSW, southeast Queensland and South Australia, while here the Victorian Default Offer is set by the Essential Services Commission.    

The DMO was intended to act as a benchmark price to stop the worst forms of price gouging, while leaving the job of putting downward pressure on prices to competition.  

However, I’ll be frank. I don't think it’s working that way and reform is needed.    

The vast majority of billpayers, some 80%, could be getting a better deal. It’s difficult to defend the DMO, when the customer is required to do the deal hunting.

We know it could be so much simpler.  

That's why we have work underway to deliver a better regulated pricing mechanism which will put downward pressure on electricity bills and also ensure the energy market better utilises the huge uptake of rooftop solar and increasingly batteries.  

Today I am announcing that next year the Government will be delivering a reformed pricing mechanism. This will be designed to get the best deal for consumers and act as the maximum price retailers can charge for standing offers in DMO regions.  

The reformed pricing mechanism will bring DMO states closer in line with other jurisdictions like here in Victoria, which this year has seen significantly smaller bill increases compared to DMO regions.    

The Government will consult on the design and I ask for your engagement, but changes could include stripping out the DMO’s competition allowance and putting further restraints on what retailers can claim back from customers in their bills.    

These reforms will also set the energy market up to better reflect our changing energy grid.  

With the rise of rooftop solar and home batteries, this is an opportunity to not only encourage greater uptake of consumer energy resources but ensure they’re better utilised across the grid.  

The promise of renewables is affordable energy – and we need to get more renewables into the system to push wholesale prices down.    

The longer expensive coal and gas keep setting the price – the longer bills will be higher than they should be.    

And events in Yallourn last week remind us, if any of us needed reminding, that coal fired power station outages are the biggest threat to reliability in the energy system.  

It also means we are more exposed than we need to be to global energy dynamics. The deteriorating security situation in the Middle East is concerning on both humanitarian and energy grounds.  

Australia’s domestic fuel reserves are above our minimum domestic stockholding obligations – but again, the more we can do to secure our energy sovereignty the better we can shield our homes and business from price spikes in an uncertain world.  

So, we need to get more renewables and storage online for a more affordable, more reliable, more soevreign energysystem.  

In three short years we have seen Capacity Investment Scheme unlock record levels of investment in Australia’s energy grid and get us on track to reach 82% renewable energy by 2030.  

In 2022, as we were establishing the CIS it was clear to reach 82% we’d need an additional 32GW of renewable capacity by 2030, comprising 23GW of generation like wind and solar and 9GW of dispatchable capacity such as batteries.  

Certainly, it was ambitious – but even my most optimistic 2022 self would have been surprised at the market’s response.  

To date we have launched six tenders worth more than half of the total required capacity – 12.3 GW of generation and 6 GW (24 GWh) of dispatchable, which will support capital investment of $37 billion.  

These tenders have all been consistently and usually massively oversubscribed.  I take this as a vote of confidence in the transition and the CIS.  

Of the tenders finalised to date, we have announced 6.4 GW of generation and 2 GW (8.0 GWh) of dispatchable capacity, which will be associated with $17 billion of capital investment.  

I am pleased to announce that in our most recent tender, for generation projects in the NEM, we received bids representing nearly 16.5GW of capacity, which is nearly three times the tender target of 6GW.  

All jurisdictions are well represented in the bids, with around twice or more the target capacity for each jurisdictions under assessment.

Many bids were hybrid generation and storage projects, with these delivering an additional storage capacity of over 20GWh for the NEM.  

Now around halfway through the CIS, we have been able to find efficiencies to streamline the tender process.  

To build on things we have learned in the early auctions and to make improvements.   

So today I’m announcing that we will reduce the time taken to finalise tender outcomes to around six months (from the current nine months)  by moving to a one stage tender process (rather than two stages, as is the case now).  

This means proponents will know the outcomes sooner and be able to decide whether to rebid into subsequent tenders.  

The beauty of the CIS is that it provides the industry investment certainty but also that we can learn and improve it as we go, as we will continue to do.  

There of course remain hurdles.    

The sector still faces social license challenges, workforce constraints, and approval times. Together with the states and the industry, we are working to alleviate these constraints, including through the implementation of Renewable Energy Transformation Agreements and the crucial work of the Australian Energy Infrastructure Commissioner Tony Mahar.

Ensuring community benefit is built into CIS contracts has been fundamental – and we’ll keep improving that.    

The CIS is designed to ensure we have the capacity needed to deliver 82% renewables and system reliability as ageing coal plants retire.  

While this is crucial, it is not enough.  

We know that 40% of a family’s electricity bill comes from the cost of networks and ensuring network costs are as low as possible is critical to delivering affordable energy across Australia.  

That’s why the Government is delivering Rewiring the Nation; to lower the cost of crucial transmission infrastructure needed to deliver cheap renewable energy to the cities and regions where it is needed most.  

But we also need to make sure we’re making the most use out of existing transmission and distribution networks.  

New technologies including analytical tools, sensors, battery firming, virtual transmission, and demand response systems offer huge potential to improve the efficiency of grids, while lowering consumer costs and improving grid security.  

That is why in the last parliamentary term the Government announced we would be investing $30 million in supporting the development and utilisation of innovative grid enhancing technologies through our Grid Enhancing Technologies grants program.  

I can announce the guidelines for this program are being released today, with applications opening on 15 July.  

Interested businesses, researchers, and others can find these guidelines at the business.gov.au website.

Just like Australia’s role in developing renewable technologies, this program will build on the cutting edge innovations that many in this room are already developing that promise to deliver greater utilisation and productivity of existing networks,reducing the need for additional network infrastructure, and improving network visibility and control.  

While this all sounds very technical, it all adds up to cheaper electricity bills for Australian families and businesses, a more secure grid, and greater resilience against dangers like bushfires, extreme weather events, and cyber risks.  

The success of the CIS and other government programs are setting us up to achieve our targets. But we have to keep going.    

Our 2035 target and net zero plan are key to unlocking opportunities for Australia in a global environment that continues to decarbonise with record investment in clean energy.  

I imagine many in this room have heard me say it before, but our 2035 target needs to be two things.    
It needs to be ambitious and it needs to be achievable.    

I think in three short years we’ve shown that we can get this balance right. And I am confident that when we announce our 2035 target, in line with UNFCCC’s September deadline, it will be those two things.  

Vitally, it won’t just be a number. It will come with a pathway for industry – it will set out the opportunities and the challenges for Australia.  

Now often I hear that same old lament coming back – the world has changed – it's all too hard. The familiar refrain – nothing we do counts.    

Well, over 160 countries have commitments to net zero, which constitute over 90% of our trade.  

So our commitment to climate action hardly makes us an outlier, it's just commonsense.

It’s also where business is – around two thirds of ASX Companies have their own net zero commitments, separate to governments and regulators.  

And our reforms in the first term are designed to be lasting, beyond single terms of government – because this work extends beyond many of our working lives.  

We have legislated our targets – and restored the Climate Change Authority to give us rigour, transparency and independence in our policy making and target setting which is in my view, international best practice.    

So, yes, the international environment is challenging – but doesn’t that make it even more important, not less important, for nations like Australia to act and help lead the conversation?  

Besides, while there have been changes on the world stage there has also been significant continuity.  

Without commenting too much on the politics of other countries, it’s worth noting that in the past year progressive governments, like the United Kingdom, Canada and Australia, have been given mandates to keep going on climate action.    

That’s why we are actively campaigning to host COP31, in partnership with the Pacific.    

To attract global investment to Australia and supercharge our transformation into a renewable energy superpower.    

Global investment in clean energy projects has exceeded AUD 3 trillion. We want to grow this, and Australia’s share in it.  

To bring the world to the Pacific and put the Pacific front and centre on the world stage. 

And extend the same steady hand that the Australian people accepted at the last election to our partners in the region, providing certainty and security in a complex world.    

We make this bid from a serious and strong position.    

We have restored Australia’s climate reputation after a very difficult decade domestically and internationally.  

We’ve been working hard with our international partners and Türkiye to resolve the bid.  

That won’t have been obvious, because we’ve kept those discussions private out of respect for Türkiye.    

It was legitimate for Türkiye to wait for the results of our election, given the Opposition’s then position.    

But given our election, and the strong support for our bid from our group, we are now hopeful for a resolution before too long.  

The challenges before Australia are serious. Our climate is changing, across our nation we see droughts in one state and floods in another.    

It’s no longer acceptable to deny this reality. Nor should we accept those who deny the global effort to limit the worst of it.    

We asked Australians to let us keep going – keep fixing the energy grid, making the energy system fairer and seizing the net zero opportunities before us.

That’s what I plan on doing and I look forward to working with you all.