The 2017 Federal Budget has outlined a $265 million energy package aimed at ensuring Australia maintains a secure, reliable and competitive energy system into the future.
The Federal Government said the measures in the energy package will set Australia up for a modern and dynamic energy system, allowing the country to keep pace with changing energy technologies, as Australia transitions to a lower emissions future.
Expanding Snowy Hydro
The budget outlines a major expansion of the Snowy Hydro scheme, with a study grant through the Australian Renewable Energy Agency (ARENA) to examine the best locations to increase the Snowy’s capacity to produce reliable, affordable renewable energy and provide pumped hydro storage.
The Federal Government has indicated to the New South Wales and Victorian State Governments that, in order to accelerate the expansion of the scheme, it is open to acquiring a larger share or outright ownership of Snowy Hydro, subject to conditions. These conditions include that the scheme would have to remain in public hands and that Snowy Hydro’s obligations under its water licence would be reaffirmed.
The Government is also looking at further hydro-electricity and pumped storage opportunities in Tasmania, South Australia and Queensland.
Solar thermal plant investment
The Government will also make available up to $110 million to build a solar thermal plant at Port Augusta in South Australia and separately provide up to $36.6 million over two years from 2017-18 to target investment in energy infrastructure in South Australia under a bilateral Asset Recycling agreement.
The Australian Energy Regulator will receive an additional $7.95 million to scrutinise energy providers to ensure they are serving consumers’ needs.
The Government will provide $7.9 million in 2017-18 to the Australian Competition and Consumer Commission (ACCC) to review retail electricity prices.
The ACCC will produce a paper within six months on its preliminary insights into the strategies and pricing behaviours of key electricity retailers.
Budget supporting increase gas supply measures
The Budget includes $28.7 million over four years to accelerate the development of gas resources, aimed at ensuring affordable and reliable energy for Australian users.
The new East Coast Gas Development Program will target faster development of onshore gas fields to meet Australian demand, while also focussing on a fair return to landholders.
Minister for Resources and Northern Australia Senator Matt Canavan said the program “will help secure the domestic gas market against possible supply shortfalls in coming years, and enable large gas intensive consumers to secure supplies on more acceptable commercial terms.”
APPEA Chief Executive Dr Malcolm Roberts welcomed the new gas initiatives.
“While the industry has tripled gas production on the east coast in the last five years, there is a pressing need for more investment to expand supply. The east coast market will require up to $50 billion in investment in the next 15 years to meet demand.
“The Commonwealth’s new $28.7 million East Coast Gas Development Program will help pull forward new gas supply projects. A similar program by the South Australian government has accelerated the development of five projects supplying the local market, with a second round of projects to be announced later this year.
“APPEA welcomes this initiative. The only genuine, lasting solution to the tight east coast gas market is more supply. More supply will boost liquidity and competition in the market, putting downward pressure on prices. We have ample resources in Australia to supply domestic and export markets – we should be using those resources,” Dr Roberts said.
Also included in the Budget is a $5.2 million national interest and cost-benefit analysis study into the construction of gas pipelines from the Northern Territory and Western Australia to the east coast, through Moomba in South Australia, to lay out the groundwork for infrastructure development that will deliver more secure and reliable power into the medium term.
Aimed to bring down the cost of gas for Australian families and businesses, the Government has already committed to the substantial gas market reforms. To deliver these reforms sooner, the Government will provide $19.6 million over four years to the Gas Market Reform Group to better facilitate gas trading, encourage greater competition to place downwards pressure on prices and ensure gas markets are more transparent and accountable.
APPEA also welcomed the Gas Market Reform Group funding saying, “progressing these reforms and improving market transparency is vital. APPEA supports monitoring of the market across the industry value chain. We are keen to see the release of the first ACCC report later this year.”
The Government also committed $2 million to the Australian Energy Market Operator to improve publication of real time assessment of gas flows and market analysis, to make it easier for the market operator, businesses and investors to make informed decisions about gas market operations.
The Government announced it is committing $13.4 million to support an Energy Use Data Model, world class data linking, analysis and modelling being undertaken by the CSIRO, to improve energy market forecasting that will facilitate better energy management and infrastructure planning.
The Budget also outlines $6.6 million over three years from 2017-18 to the Australian Competition and Consumer Commission (ACCC) to establish a monitoring regime for the gas market by using its inquiry powers to compel the gas industry to provide greater transparency of transactions in the gas market, including factors affecting supply and pricing.
Investment in water infrastructure
The $500 million National Water Infrastructure Development Fund and the $2 billion National Water Infrastructure Loan Facility outlined in the budget aim to incentivise state and territory governments to fast track priority projects that will support the growth of agricultural industries and regional communities.
The Federal Government has said affordable and reliable water supplies are key to growth in regional Australia, to drive regional investment, agricultural production and jobs.
Completing NBN rollout
The Government has also continued its commitment to the NBN network, aiming for the network to be available to half of all Australian premises by mid 2017. Further expanding to around 9 million premises by mid 2018, the government is maintaining their investment of $5.2 billion to connect regional households and businesses to the National Broadband Network.