Decisions in relation to the funding of energy initiatives are included in the Portfolio Budget Statement 2018-19 for the Department of the Environment and Energy and related media release.
Powering forward: Next generation
The Australian Government is delivering a more affordable and reliable energy system as we transition to a lower emissions future
We’re building on the significant achievements of the past year—addressing energy generation, network and retail costs, while pursuing reforms that place an emphasis on well-regulated markets and technology—and powering forward with an additional investment of $41.5 million in the 2018–19 Federal Budget.
We are creating sensible, workable and affordable market-based solutions that meet the requirements of the Australian people.
We are focusing on measures that deliver energy affordability and reliability, and help us meet our emissions reduction targets.
The design of the National Energy Guarantee will be supported by Budget expenditure including:
- implementing recommendations from the Independent Review into the Future Security of the National Electricity Market (the Finkel Review)
- reforming the gas market
- improving information and reporting to support better investment decisions
- working with the states and territories through the COAG Energy Council to improve energy markets and energy efficiency
An investment of $18.7 million over five years from 2017–18 will allow the government to push ahead with its national leadership on energy policy, including the design and development of Australia’s first integrated climate and energy policy—the National Energy Guarantee.
Last year, we welcomed the Finkel Review as a blueprint for the once-in-a-century transformation currently taking place in Australia’s energy system.
This Budget provides new funding of $3.1 million to support the development of the National Energy Guarantee as a market-based solution for the National Electricity Market (NEM).
The guarantee is designed to put downward pressure on household and business energy bills by supporting more investment in electricity supply.
It will improve reliability and increase investment in new and existing dispatchable supply. It will encourage the right investment in the right place at the right time.
Finally, the guarantee will reduce emissions, using a range of technologies including coal, gas, hydro and renewables.
The government is leading the design elements of the guarantee related to Australia’s emissions reduction targets.
The Energy Security Board, through the COAG Energy Council, will progress the detailed design of the guarantee to the next Energy Council meeting in August.
New funding of $6.1 million will go towards improving weather information to support the security and resilience of Australia’s energy infrastructure.
Measures to support better information will provide $7 million towards helping consumers get the best energy deal and seek advice on ways to reduce their bills.
The funding will support the development of a data platform which enables consumers to quickly share their data with service providers to get more timely and accurate energy advice.
This will help implement a Finkel Review recommendation to improve consumers’ access to their energy data, and support implementation of the government’s consumer data rights policy in the energy sector.
Energy consumers will also benefit from a $600,000 investment to support development of a register of distributed energy, such as solar panels and batteries, which will support better management of the electricity grid.
Putting downward pressure on domestic gas prices while ensuring security of supply is still a priority.
Gas-powered generation is increasingly important to the security of the NEM. Gas sets the price for electricity 22% of the time on average across the NEM states.
As structural changes occur in the electricity generation market, that market increasingly relies on the underlying price of gas.
Moratoria and bans continue to have a significant impact on gas exploration and production, and accordingly this affects supply and prices for commercial, industrial and residential consumers.
Following deep and wide-ranging reforms over the past year, we will continue our work on making gas markets more transparent and tackling a lack of competition.
Over the next two years, the government will provide $2.5 million to continue to improve regulation in the gas market and support the Prime Minister’s Heads of Agreement with LNG exporters, including:
- funding the Australian Energy Market Operator to improve the operation of the gas hub at Moomba
- developing a gas swap product to allow increased flexibility in the market and reduce transport costs
- publishing a national gas infrastructure, pipeline and storage security statement
Funding will also support complementary improvements to the Gas Bulletin board to improve transparency and liquidity in the gas market.
These measures build on the $86.8 million package in the 2017–18 Budget which was aimed at addressing immediate gas shortfalls and record prices, and securing gas before it is shipped offshore.
Securing our future
The rapid transformation of our energy markets means we need the best and most up to date advice on our energy future to better detect threats and monitor performance.
We will invest $12.8 million over six years from 2018–19 in revitalised assessments of our energy security and resilience, with a further $4.9 million every three years from 2024–25.
This will include an accelerated examination of Australia’s domestic liquid fuel security to be completed by the end of 2018.
Australia’s liquid fuel supply increasingly depends on overseas sources and relies on market forces to maintain reliability and affordability.
This assessment will identify whether further action is needed to ensure our supply is reliable.
Supporting COAG Energy Council reforms
The COAG Energy Council has an ambitious energy agenda to manage and reform national energy markets. This Budget provides ongoing support of $7.5 million for the Commonwealth to lead the work program in areas including:
- energy market transformation including rule and law changes for a decentralised energy generation and transmission system
- energy efficiency including updating the National Construction Code and implementing the Nationwide House Energy Rating Scheme
Snowy Hydro for a new generation
This year, we secured outright ownership of Snowy Hydro to help facilitate the effective and efficient expansion of Snowy Hydro 2.0. A requirement of the sale is that funds received by the states are reinvested in productive infrastructure projects.
Budget 2018-19 Australian Government