The Federal Government has released its Budget 2023-24, with a focus on sustainable energy, water infrastructure and protecting the health of critical water systems.
Key components of the energy budget included energy bill relief for consumers, hydrogen investment and legislation of a national Net Zero Authority to assist Australia in achieving net zero emissions.
For the water sector, the budget is set to deliver national water security through investment in critical infrastructure, reform the water market, and protect the Murray-Darling Basin Plan.
Australia’s renewable energy future
Sustainability was the primary focus of energy initiatives in the budget, with the government announcing funding including:
- $2 billion for the Hydrogen Headstart initiative, supporting the biggest green hydrogen projects to be built in Australia
- $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
- Legislation of a national Net Zero Authority to ensure workers, industries and communities can seize the opportunities of Australia’s net zero transformation
- 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
- $46.5 million to the Australian Energy Regulator to regulate energy markets and protect consumers through the transformation
- $12 billion of its $20 billion investment in Rewiring the Nation to transformational transmission projects, including:
- $1 billion in Tasmania’s Battery of the Nation projects
- $1.5 billion towards Renewable Energy Zones and offshore wind in Victoria
- $4.7 billion to unlock critical transmission in New South Wales
- $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
Energy bill relief for consumers was also on the table, with households and businesses slated to access energy upgrades to improve energy use and save on energy costs with the unveiling of the $1.6 billion Energy Savings Plan.
Water winners
Water security was a key focus of the water budget, with the government investing $197.1 million in projects which provide safe, reliable and secure water for regional and remote communities.
The budget also allocated $3.5 million to the First Nations Environmental Water Partnerships Program, helping First Nations communities participate in water planning and decision-making. This will develop partnership agreements between First Nations organisations in the Murray–Darling Basin and the Commonwealth Environmental Water Holder (CEWH).
The government has committed to delivering the Murray–Darling Basin Plan in full, working closely and collaboratively with state and territory governments to deliver that promise. It’s investing $103.7 million to undertake the first review of the Basin Plan, which will be based on updated science and incorporate knowledge of First Nations people.
$32.7 million will be invested to assist the government deliver on its commitment to restore transparency, integrity and confidence in water markets. This includes:
- A new Water Market Hub – a digital platform for national water data management
- A new Water Markets Website – allowing farmers to access live water market updates for the first time
- A new water market data standard – guaranteeing transparency and enforceability of the data being provided to the Bureau of Meteorology
Industry response
Clean Energy Council Chief Executive, Kane Thornton, said the budget demonstrates that the Federal Government recognises the crucial role of clean energy in Australia’s economic future and how clean energy and electrification drive down power prices and manage inflation.
“This budget has the building blocks to keep Australia in the clean energy investment race and balances cost of living relief for small businesses and households through clean energy and energy efficiency,” Mr Thornton said.
“These are concrete steps in building the foundation to accelerate the clean energy transition.”
ARENA Chief Executive Officer, Darren Miller, has welcomed the announcement of the Hydrogen Headstart initiative and said the initiative will catalyse Australia’s hydrogen industry and other clean energy industries, and help position Australia as a global hydrogen leader.
“Australia has an unparalleled opportunity to become a global green hydrogen leader, but we can’t afford to lose our momentum as other competing countries step up their ambitions and support,” Mr Miller said.
“With this funding, we are looking to incentivise green hydrogen production in Australia by backing early projects that will be among the largest in the world.
“This funding will reduce the cost of green hydrogen produced via renewable electricity and will scale up our hydrogen sector. These projects will create thousands of regional jobs and will help reduce emissions in industry in line with our climate targets.”
Energy Networks Australia has welcomed Commonwealth Government assistance for energy bill relief provided in the 2023–24 federal budget.
ENA acting Chief Executive Officer, Garth Crawford, said the initiatives were welcome for households and businesses doing it tough.
“It is pleasing to see the Commonwealth in partnership with the States and Territories recognise the important role governments can play in helping ease the extraordinary cost of living pressures Australians are facing,” Mr Crawford said.
“Global events are having a significant effect across the economy and supply chains, particularly impacting the energy sector and its customers. There is also a cost to decarbonising that the bill relief and energy efficiency measures recognise.
“Networks are doing their part to minimise impacts by keeping costs down as much as possible while ensuring we can deliver safe, reliable energy and continue to support the transition to renewables.”
Mr Crawford also welcomed recognition in the budget of the critical role renewable hydrogen would play in delivering the net zero energy transition and called for a renewable gas target to boost investment.
“The $2 billion Hydrogen Headstart package is an opportunity to capitalise on the huge value in Australia’s existing pipeline network. Investment in the sector could be further supported by a national renewable gas target,” Mr Crawford said.
“Gas networks can play a vital role in helping decarbonise our energy system and can carry and deliver hydrogen blends to customers now. Repurposing them to deliver renewable gas will provide diversity of energy supply, retain customer choice and support electrification by providing a vital back up to intermittent renewable generation.”
In response to the Hydrogen Headstart Initiative, CEO of the Australian Hydrogen Council, Dr Fiona Simon, said the Federal Government sent a strong signal that it is committed to the hydrogen industry’s development, particularly in light of fierce global market competition for investment dollars.
“The AHC commends the Federal Government for this demonstration of confidence in the vital role that renewable hydrogen has to play in the energy transition, and in Australia’s vital role to be a hydrogen producer for our region,” Dr Simon said.
“Competitive hydrogen production contracts are a much-needed market mechanism to provide revenue support for flagship projects, and will help get more and more large hydrogen projects off the ground so we can scale up to gigawatt scale capacity as soon as possible.
“As Australia’s peak body for the emerging clean and renewable hydrogen industry, we are looking forward to working with the government and our members to bring this important policy to life.”
