The 2019 federal election results are in, with Labor conceding defeat and the Liberal National Coalition forming a majority government. With climate change and rising energy prices among the most fiercely debated issues during the campaign, what exactly do the election results mean for the utility industry?

The majority of policies promoted by the Liberal Party in the lead up to the election centered around energy initiatives, including a climate solutions package, energy assistance payment and a price safety net to protect customers.

There was less emphasis on the water industry, but there was a pre-election promise to establish The National Water Grid from the re-elected Member for Riverina and Leader of the Nationals, Michael McCormack.

Below we break down the policies the Liberal party campaigned on and what exactly a Liberal Coalition Government will mean for utilities.

 

Energy

The policy the Liberal party campaigned on was largely centred around lower power prices for consumers, which would be driven through initiatives including the Energy Assistance Payment, the price safety net and the Underwriting New Generation Investments (UNGI) program.

Energy Assistance Payment

Announced in the Budget, the one-off Energy Assistance Payment is expected to assist more than 3.9 million Australians, who will be able to use the payment to help with their next energy bill and cost of living expenses.

The payment of $75 for singles and $125 for eligible couples will be exempt from income tax and paid automatically before the end of the current financial year, subject to the passage of legislation.

The payment will provide support to:

  • 2.4 million Australians receiving the Age Pension
  • 744,000 recipients of the Disability Support Pension
  • 280,000 carers receiving the Carer Payment
  • 242,000 Parenting Payment Single recipients
  • 225,000 veterans and their dependants receiving eligible payments from the Department of Veterans’ Affairs

On 3 April it was announced that the payment would be extended to those receiving Newstart.

Price safety net

At the end of April, the Australian Energy Regulator (AER), under instruction from the Government, issued its final determination on Default Market Offer (DMO) prices based on recommendations made by the Australian Competition and Consumers Commission (ACCC).

According to the AER, the final decision will deliver annual reductions from the standard standing offer bill for residential and small business customers in New South Wales, South-Eastern Queensland and South Australia.

The DMO prices will come into effect on 1 July 2019.

UNGI program

At the end of March, Energy Minister, Angus Taylor, announced the twelve projects which were shortlisted as part of the UNGI program.

From 66 proposals, the Government – adhering to a policy of technology neutrality – agreed to a shortlist of 12 projects – six renewable pumped hydro projects, five gas projects and one coal upgrade project.

According to the Government, the inclusion of six hydro projects tied in well with it’s recent announcements regarding Snowy 2.0; and the five gas projects signalled the Coalition’s focus on gas as a transition fuel as Australia move towards a more renewables-focused energy market.

The twelve shortlisted  projects are:

  • Alinta Energy, Gas, East Gippsland, Victoria
  • Alinta Energy, Gas, Reeves Plains, South Australia
  • Quinbrook Infrastructure Partners, Gas, Gatton, Queensland
  • APA Group, Gas, Dandenong, Victoria
  • Australian Industrial Energy, Gas, Port Kembla, NSW
  • Sunset Power and Delta Electricity, Renewable Pumped Hydro, Lincoln Gap, South Australia
  • Rise Renewables, Renewable Pumped Hydro, Baroota, South Australia
  • UPC Renewables, Renewable Pumped Hydro, Armidale, NSW
  • BE Power Solutions, Renewable Pumped Hydro, Cressbrook Reservoir Crows Nest, Queensland
  • Hydro Tasmania: Battery of the Nation, Renewable Pumped Hydro, Tasmania
  • SIMEC Zen Energy, Renewable Pumped Hydro, Eyre Peninsula, South Australia
  • Delta, Coal Upgrade, Lake Macquarie, NSW

In addition to their initiatives around reducing energy prices, the Coalition also campaigned on a $3.5 billion Climate Solutions Package to ensure that Australia delivers on its 2030 climate commitments. $2 billion of the package will go towards practical emission reduction activities in partnership with farmers and Aboriginal communities.

A $100 million Environment Restoration Fund was also announced with a view to deliver large-scale environmental projects. This will include protecting coastlines and waterways, as well as cleaning up waste.

The Environment Restoration Fund will complement a new Communities’ Environment Program, providing smaller grants for projects that target local community priorities.

Additional energy policy measures

Outside of the key focus areas, the Liberal Party announced a range of additional initiatives throughout their campaign which will impact the energy industry:

  • Investing $1.38 billion in Snowy 2.0 to support new renewable energy for Australia’s future energy mix to deliver affordable, reliable power.
  • $56 million for Tasmania’s Marinus Link project – the second interconnector between Tasmania and the mainland. Combined with the Battery of the Nation, these projects will help cut power prices and maintain the reliability of the National Electricity Market, create up to 3800 direct and indirect jobs during construction and deliver an economic stimulus of up to $7 billion.
  • $79.2 million over six years for energy efficiency standards and programs to reduce costs for businesses, community groups and households.
  • $50.4 million to support feasibility studies for microgrids in remote and regional areas, including off-grid and ‘edge of electricity grid’ areas where local distributed generation and demand management is used to ensure supply.
  • $3.2 million to establish a Priority Transmission Taskforce which will speed up delivery of transmission projects identified in the Australian Energy Market Operator’s 20-year Integrated System Plan.
  • $13.5 million has been allocated to The Underwriting New Generation Investments program which aims to increase reliable electricity supply and improve wholesale market competition to reduce wholesale electricity prices and support a roadmap for electricity generation opportunities in North and Central Queensland.

The Budget also included a range of energy-related initiatives around construction, infrastructure and homes, including:

  • Expanding the National Australian Built Environment Rating System (NABERS) to improve and increase energy efficiency in the commercial building sector
  • A review of the Commercial Building Disclosure (CBD) program to expand it to more high-energy use buildings
  • The Trajectory for Low Energy Buildings to help homes become more energy efficient
  • The introduction of a new energy rating label for heating appliances to help consumers make more informed choices about energy efficiency, which is expected to save households hundreds of dollars each year in heating costs

 

Water

The National Water Grid

Michael McCormack announced in early May that the Liberal Government intends to establish the National Water Grid — a statutory authority to deliver strategic planning and project management for water policy and water infrastructure right across the nation.

The National Water Grid would bring together leading scientists to determine the most efficient ways to harvest and harness water, in the hope of ensuring that decisions regarding water and water infrastructure by future state and federal governments are based on the best available science.

The creation of a National Water Grid would provide a pipeline of all established, current and future water infrastructure projects, allowing for the identification of missing links and examination of how large-scale water diversion projects could be established to deliver reliable and cost-effective water to farmers and regional communities.

An initial investment of $100 million would be made to better understand Australia’s own water resources, and kick-start investigation and delivery of water diversion projects.

Drought support

Though a call for a comprehensive national drought policy was not acknowledged in the 2019-20 Federal Budget; it did include $4.2 million to maintain a National Drought Map.

The Bureau of Meteorology also benefited from the Liberal party’s May budget, with $28 million allocated over four years to install new radars and rain gauges in Queensland, on top of the existing off-budget $3.9 billion Future Drought Fund that was introduced by the Federal Government earlier in 2019.

National Water Infrastructure Development Fund

The Liberal Party has also made a $3.3 billion commitment to the National Water Infrastructure Fund over recent years, with a $750 million allocation earlier in 2019 for work on initiatives in Queensland.

Before joining the Utility team, Eliza worked as a freelance journalist for a number of years. Eliza has the rare talent of being able to find the nuggets of gold in otherwise average source material, and like any self-respecting member of gen-Y is a whiz when it comes to social media marketing and management.

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