Over the past month, a lot happened on the political front:
Federal Minister for Climate Change and Energy, Chris Bowen, said the Federal Government will work with industry, advocacy groups, experts, unions and communities to develop detailed decarbonisation plans for heavily polluting sectors including industry, agriculture and land, transport and resources. Minister Bowen highlighted the creation of circular economies as an issue for all sectors to address.
The Queensland Government released plans for 12 renewable energy zones. The Government’s draft Renewable Energy Zone Roadmap, which is currently under consultation, will provide a blueprint for development of the zones, including the establishment of consultation groups and expert panels.
Energy Minister Chris Bowen announced the Hunter Valley as Australia’s second offshore wind zone. The declared area stretches over 1,800 square kilometres between Swansea and Port Stephens and lies 20 kilometres from the coast in the north and 35km in the south.
The Australian indicated that its Hydrogen Headstart program – a AU$2.0 billion subsidy program announced in the May Budget – will focus on providing revenue support for large-scale renewable hydrogen projects (like the CQ-H2 Project).
The Department of Climate Change, Energy, the Environment and Water (DCCEEW) released the Review of the National Hydrogen Strategy Consultation Paper on 7 July, following the Energy and Climate Change Ministerial Council agreeing to a review of the strategy on 24 February. The DCCEEW is seeking stakeholder views on how Australian governments can ensure we have a national strategy that is fit for purpose for our evolving hydrogen industry.
On 10 July, the Competition and Consumer (Gas Market Code) Regulations 2023 Legislative Instrument was published. The Regulations aim to address purported long-term issues in the wholesale gas market to ensure a reliable and affordable supply of gas. They impose requirements on agreements to supply regulated gas, including prohibitions on exceeding a reasonable price for making certain offers to supply regulated gas on a gas trading exchange, entering into agreements to supply regulated gas, or supplying regulated gas under such agreements.
On 19 July, the DCCEEW published the Safeguard Mechanism: International Best Practice Benchmarks Consultation Paper, discussing guidelines to set international best practice benchmarks for use under the reformed Safeguard Mechanism. Once finalised, the guidelines will inform the DCCEEW’s development of international best practice emissions intensities, which will be used to calculate baselines for new facilities and new products from existing facilities.
The AEMC published the Reliability Panel Guide to Applying the Emissions Component of the National Energy Objectives Draft Guide on 24 July 2023 following Energy Ministers approving an update to the National Electricity Objective which embeds emissions reduction as part of the long-term interests of electricity consumers. The AEMC will use this guide when applying the emissions reduction component of the updated national energy objectives, alongside the other considerations in the objectives, in its rule-making process and when making recommendations in reviews.
The full Energy and Climate Change Ministerial Council (ECMC) met for the second time in Devonport Tasmania on 7 July 2023, with a focus on collaborating for climate change action and energy reliability and affordability. Key items agreed at the meeting included developing sectoral decarbonisation plans as part of the Net Zero buy 2050 Plan, reviewing the National Hydrogen Strategy (noted above) and the AEMC continuing work on the Congestion Relief Market and Priority Access (Transmission Access Reform). In the Communique, the Council also flagged that the Commonwealth will begin consultation with stakeholders on the design of a national Capacity Investment Scheme “imminently”.
Senior energy industry figures – including former Energy Security Board Chair, Dr Kerry Schott, former Snowy Hydro CEO, Paul Broad, and Engie Australia CFEO, Rik De Buyserie, – called out doubts about whether Australia is positioned to achieve its 2030 emissions reduction targets. Dr Schott said slow approval processes for big projects including transmission, along with a shortage of skilled labour where impacting the timing of the nation’s energy transformation.
Rio Tinto and Japan’s Sumitomo Corporation announced they will build a $111 million hydrogen plant at Gladstone’s Yarwun alumina refinery, to help reduce carbon emissions from the refinery process. The move is reflective of a number of hydrogen projects Stanwell learned about on a recent clean energy study tour. These projects cater to local offtakes, and aim to reduce emissions from hard to abate industries such as steel production, aviation and shipping fuel development as well as chemical manufacturing.