Keynote at Australian Clean Energy Summit 2024, Sydney NSW
Almost two years ago to the day, Prime Minister Anthony Albanese addressed the Sydney Energy Forum. The forum was one of the first big events of our government – we had been sworn in as ministers barely a month earlier.
The Prime Minister laid out an ambitious agenda in that speech. Reading back over it, it is remarkable how much of it has been achieved. Legislated climate targets. Vehicle efficiency standards. Community batteries, a hydrogen program, accelerating the decarbonisation of our grid.
And that’s before we even get to the energy price relief plan, the Capacity Investment Scheme, Future Made in Australia, and the Household Energy Upgrades Fund.
The past two years have seen a tremendous amount of dynamism and innovation after a period of stasis and denial.
Now don’t worry – I don’t intend to spend 15 minutes listing the government’s achievements!
I want to use my time with you today to talk about the three big renewable energy stories that I see unfolding at the moment. They are each stories of transition, and they are:
- The transformation of our homes
- The transformation of our grid; and
- The transformation of our economy.
The thread that ties each of these together is you – the clean energy community – and the capacity and world leading skills you have developed.
The first story of transformation belongs to a family in Pennant Hills whose home I visited a few weeks ago. They had taken control of their energy use by installing panels and a battery. They were pretty up front about their reasoning – it was an economic decision taken in support of their family’s economic plan for themselves.
What is remarkable about that is how unremarkable it is.
Australia has more rooftop solar per capita than any other country. It is an Australian success story. And it also places us at the leading edge of a global transformation. Households and businesses are now producers as well as consumers of energy.
And it’s not just solar and batteries. Families are opting for smart appliances that run at noon when solar is plentiful. Choosing induction for cooking and heat pumps for aircon and hot water. Or investing in the energy efficiency of their homes. This is a bottom-up change being driven by individual purchasing decisions, because high performance appliances and homes are more comfortable to live in and cheaper to run.
The upfront costs involved are a barrier to many. That’s why in the 2023/24 Budget we included a $1.7 billion package that would provide low-cost finance through the CEFC for households and would also directly upgrade homes with some of the worst energy performance in Australia’s social housing pool.
This isn’t just a question of equity. AEMO is predicting significant increases in consumer energy resource installation that will strengthen the NEM if we can seize the opportunities that come from coordination. We have released the National Energy Performance Strategy to provide a framework for working through the complex technical and commercial challenges involved, and we are preparing a Consumer Energy Resources Roadmap to focus on reforms where a national approach is required.
The second story is possibly the most familiar to you – the transformation of the grid.
10 years ago, three quarters of our electricity came from coal. Today it is barely half.
You should be proud as an industry of the renewables rollout you have managed to deliver. There is now four times as much installed capacity as there was 15 years ago. It is worth reflecting on how enormous this commercial and technological undertaking has been. You have created new skilled workforces, built robust supply chains and developed new and innovative business models.
This is not a simple task, and we’re grateful to have been able to work with you in developing policies to address the most significant of the challenges:
- Addressing risk and uncertainty in an evolving market via the Capacity Investment Scheme.
- Tackling planning issues via Renewable Energy Transformation Agreements with the states and territories.
- Supporting the build out of transmission via Rewiring the Nation
- As well as the ongoing work with AEMO to streamline the connection and regulatory timelines.
The questions of social licence are for all of us.
Chris Bowen and I had the chance to hear from local leaders at the local government conference a few weeks ago, and its reflected what we hear across the country. It’s clear that some communities are excited, and others are asking questions.
We know there are jobs and industries waiting for them. It’s one of the reasons why we have built community benefit criteria into programs like the Capacity Investment Scheme. If we want your industry to be sustainable over the long term, it needs to have excellent partnerships with communities.
It is up to us – both government and industry, working together – to demonstrate to communities that the economic opportunities are real and tangible.
And that is the third and final story. It is the story of the transformation of our economy, and of prosperity.
Many of us can remember the effect the mining boom had on Australia’s economy in the 2000s. You could feel the impact whether you were a white-collar worker in a city high rise, a tradesperson in a regional town, or running a small business in the suburbs. The RBA estimates the mining boom lifted Australian disposable income by 13%.
It was a powerful example of how we prosper when Australia manages to surf a global wave of investment and production.
There is another wave coming.
The world is going to need a host of green products as it decarbonises.
- Fuels, like hydrogen
- Sustainable substitutes for carbon intensive products like steel, cement and aluminium
- Critical minerals for solar panels and batteries
The key to producing so many of these products is plentiful renewable energy. And Australia has the physical resources, mature commercial actors and sophisticated finance system needed to supply it.
But as you know, that’s not enough. This is a race. And if Australia doesn’t act purposefully, we will miss out on the economic benefits that will flow from being a supplier for the global net zero transformation.
That’s why the investment in this budget in the Future Made in Australia program is so important. It is a genuinely transformative economic intervention that will kickstart green industries. The legislation introduced by the Treasurer seeks to place in statute our priorities for this new boom:
- A bigger role for our domestic supply chain
- More consideration of community benefit; and
- And crucially – more emphasis on jobs and skills.
Each of these three stories of transformation – of our homes, of our grid, and of our economy – is capable of delivering substantial and tangible benefits to ordinary Australian households.
Each of them involves complex policy, technical and coordination questions.
And, importantly, each of them depends on a skilled and capable workforce to deliver them.
Australia has experienced economic transitions in the past where there weren’t enough jobs. The clean energy transition poses the opposite challenge – without concerned action, we may not have enough skilled people to make the most of the opportunities we are presented.
It is why one of the most significant energy policies in the last budget doesn’t formally live in the energy portfolio, but in skills. My colleague Brendan O’Connor is delivering an enormous uplift in the facilities and capabilities of TAFE, including by building new centres of excellence.
This builds on the programs we have already implemented for Fee Free TAFE and new energy apprenticeships.
Those programs are already starting to pay dividends.
When I met with a class of new electrical apprentices at a Queensland TAFE the other day, their teacher remarked to me that the range of students he had coming through was more diverse than he had ever seen. More women. More late in life learners who were changing careers and retraining to join the clean energy workforce.
The students I talk to are not just drawn to the pay and job security of a career in energy – they’re also attracted to the opportunity to be part of a new and growing industry.
It’s a version of the cautious optimism I hear when I talk to some of the communities at the forefront of the transition – places like the Hunter, Spencer Gulf or the Latrobe Valley. They are starting to see tangible examples of the future they have been promised – a pipeline of renewables projects and the green industries that follow.
You may be wondering why I haven’t mentioned nuclear yet. It’s because it's a distraction from the real and serious economic challenges and opportunities we have in front of us.
The climate benefits of renewables are undeniable, but in Australia this is a transition also being driven in a large part by raw economics.
Australia’s coal generators are old. They require ever more expensive maintenance to manage ever more likely breakdowns. They’re at the end of their life. And that means that the Coalition’s plan to “pause renewables” now and install nuclear in the 2040s leaves a pretty big gap.
The coalition failed this exact same test the last time they were in government. For every 4GW of dispatchable power that left the grid, only 1 GW was brought on.
Australia didn’t have 9 years to waste on energy policy paralysis in 2013. We don’t have another decade to waste now.
The renewables transformation of our homes, our grid and our economy is a once in a generation economic opportunity that can deliver jobs and lift living standards. It is an opportunity that won’t wait for us.
Our shared task is to deliver on that promise.