The Federal Budget energy measures released last night offered no surprises in terms of energy infrastructure, electricity costs and Australia’s energy future.
It did include election-priming electricity bill relief of $75 for social security recipients, which could be a case of too little too late. Even that was limited, with NewStart, AusStudy and AbStudy being exempted from the help. The Government backtracked this morning and added those categories to the assistance package.
The core of the Federal Budget energy measures is the $3.5 billion Climate Solutions Package released in February 29.
The Morrison Government’s Climate Solutions Package includes:
- A $2 billion Climate Solutions Fund to reduce greenhouse gases across the economy through the existing Emissions Reduction Fund.
- Snowy 2.0 pumped storage hydro and the second interconnector to Tasmanian to create the Battery of the Nation concept with Tassie hydro backing up mainland grid.
- A National Electric Vehicle Strategy to ensure a planned and managed transition to new vehicle technology and infrastructure.
- Green and clean local environments by supporting local communities.
The Coalition’s National Vehicle Strategy so far consists of a one-sheet statement greeted with derision by the industry.
The Emissions Reduction fund will now be spread over 15 years rather than 10 as initially suggested.
The Fund “creates a positive incentive for Australian businesses to adopt smarter practices to cut the amount of greenhouse gases they create.”
Federal Budget energy measures: May election looms
The Budget and its associated Federal Budget energy measures will soon be followed by the announcement of a mid-May federal election.
The Labor Party has upped the ante in the energy stakes by making bold statements on emissions reduction and electric vehicles.
Prime Minister Scott Morrison is sticking to an Abbott-era carbon emissions reduction target of 26 per cent by 2030. However, Labor Leader Bill Shorten has announced a reduction target of 45 per cent by 2030.
In addition, Labor policy calls for 50 per cent renewable energy in our electricity mix by 2030.
While electricity coal-fired electricity generators remain the biggest greenhouse gas polluters, Labor is also taking aim at transport.
Electric vehicles: driving Labor’s transport vision
Labor announced on Monday it would introduce tax breaks to ensure half of all new cars sold in Australia by 2030 are electric vehicles.
Labor is also offering $2,000 rebates for solar batteries for 100,000 households, with a target of 1,000,000 batteries by 2025.
The Morrison Government introduced its Fair Deal on Energy Prices plan to cut electricity costs in October 2018.
The plan included the Underwriting New Energy Generation program as well as stricter regulation of retailers to stop price gouging.
Underwriting New Energy Generation
The Coalition’s most original policy on energy is its Underwriting New Generation Investments program. This offsets some of the risk to investors in new electricity generators.
While the program doesn’t rule out coal investment, it will be using tax payer funds to define our energy future. As such its decisions will signal the government’s intent when it comes to new electricity production.
It will do this by underwriting returns for newly-built sources of electricity generation. If an agreed electricity “floor price” drops below a trigger point, the federal government will cover the shortfall.
So far, 12 shortlisted applications include a mix of gas and hydro generation. Only one is for coal: the upgrade of the NSW Vales Point plant owned by Delta Energy. The program received no solar power or wind generation applications.
As the federal election announcement looms, Labor and the Coalition are already in campaign mode. It’s likely that electricity prices and climate change will feature in this election, as it did in Victoria last year and in the recent NSW election.
Will the Morrison Government’s conservative approach to energy will win the hearts and minds of the public? Will Labor’s ambitious energy plans prove more attractive?
Expect more pre-election discussion of energy policies from Energy Matters in the weeks to come.
