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1 MARCH 2024
Welcome to our fortnightly news round-up!
PETROSTATE TO ELECTROSTATE – QLD ROARS AHEAD
Our new CEF report released this fortnight – Queensland’s Energy Transformation: From Coal Colossus to Renewable Energy Superpower – showed that the sunshine state is on track to end coal power by 2035 and hit 80% renewables as investment surges into clean energy, putting the onus on the Federal government to speed transition.
The report, led by Matt Pollard, found that Queensland’s nation-leading strategic plan for transmission, large-scale low-cost renewable energy and Consumer Energy Resources (CER) is crowding-in a tidal wave of public and private capital. Leveraging the game-changing $62bn Energy and Jobs Plan, this is accelerating the state’s energy transition.
QLD is now at the precipice of transforming from a legacy coal and gas petrostate to a cleantech superpower in the critical minerals and green hydrogen key to global decarbonisation, setting it up for its economic future as a zero-emissions energy, employment, trade and investment leader, reducing reliance on expensive, polluting fossil fuels and putting downward pressure on household and commercial energy bills.
As Simon Corbell, chair of the Clean Energy Investor Group said, "As CEF highlights, Queensland is on track to deliver its $62bn transformational Energy and Jobs Plan paving the way for significant opportunities for private capital to invest in renewable energy projects to decarbonise the state’s electricity supply. The clarity provided to investors throughout the plan creates a strong market signal and lays the foundation for further private investment in export scale projects which would unlock the full potential of Queensland's development pipeline."
In the days following the report release, QLD announced a $570m investment into a battery industry strategy to supercharge processing of battery materials such as critical minerals, manufacturing of cells, pack assembly, installation and recycling, leveraging all the associated employment and industry investment potential. The government estimates this could generate a lift of $1.3 billion to the economy and over 9,000 jobs by 2030, boosting regional employment as it sets the state up to value-add its superabundant critical minerals reserves onshore pre-export using its abundant renewables resources to power processing.
QLD’s progress also has implications for nationwide decarbonisation, putting pressure on the Prime Minister Albanese and the federal government to likewise accelerate transition investment at a scale commensurate with our nation’s once in a century opportunity.
>>See the media on our report in Australian Financial Review, our op eds in the Guardian and Renew Economy, coverage in PV Magazine, interviews with Tim Buckley on ABC Radio Brisbane and Sunshine Coast, and TV coverage right across regional QLD on WIN News, as well as coverage in specialist publications including Energy Source & Distribution and Proactive Investors; and our response to the battery announcement in over 100 mastheads including Smart Company via AAP.
WE JOIN TWIGGY IN LASHING COALITION LIES, CALLING FOR ACCELERATED TRANSITION
Our op ed in the AFR this week backed Dr Andrew Forrest’s excellent National Press Club address blasting the latest campaign from the Coalition to wreck Australia's clean energy revolution.
The incorrigible climate denialists are busy spruiking for public investment to be diverted from large-scale firmed renewables infrastructure to new subsidies for domestic rooftop solar “firmed up” with the vapourware of “nuclear and CCS on coal and gas”. More "policy" nonsense from the perpetrators of a devastating decade of energy transition failure, playing to the interests of the coal and gas lobby in prolonging Australia’s costly fossil fuel addiction to the detriment of everybody else.
Twiggy aptly observed that “If we swallow this new lie that we should stop the rollout of green energy and that nuclear energy will be our fairy godmother, we will be worse off again,” as he called out “bulldust nuclear policies of politicians masquerading as leaders” which “help no one”, and urged the Coalition to “stop dividing us with the false hope that we can cling to fossil fuels” and “betraying the bush”.
As we argued, utility-scale firmed renewables and transmission, and support to households to solarise and electrify everything (including our cars), are mutually complementary. Investment in both is essential to underpin our whole-of-economy energy transition at speed and scale, leverage Australia’s decarbonisation potential, and maximise the climate, economic and social outcomes. This will slash energy bills, build grid resilience and enable us to “embody” decarbonisation in our critical minerals and metals exports by processing, refining and manufacturing using clean energy.
We call on Treasurer Jim Chalmers to seize Australia’s opportunity and respond at speed and scale in the May Budget to cleantech stimulus programs the world over, including the massive $1tn US Inflation Reduction Act. This can be done by bolstering strategic public capital investment in Australia’s transition funding authorities.
Great to see the Clean Energy Finance Corporation is investing in 6 big batteries across Australia bringing 1.7GW of new storage capacity on stream – patient strategic public interest investments. Let's triple down, fast! It’s time to mobilise the massive in-house financial capacity and public interest mandates of the Future Fund and double the capital and impact of each of Northern Australia Infrastructure Facility (NAIF), Export Finance Australia, Australian Renewable Energy Agency (ARENA) and Virescent Ventures.
As Twiggy also highlighted, Australia now has an energy security issue, relying on a staggering $60bn a year of imported diesel and oil for which the government provides $11bn a year in subsidies, an own-goal and huge barrier to domestic decarbonisation and electrification. We urge the Treasurer to consider a $50m per group annual cap to the diesel fuel rebate, which would raise $14 billion by 2030 that could be invested in commercialising the domestic deployment of mining-sector electric vehicles.
60 years of robbing taxpayers for this massive imported fossil fuel subsidy is long enough!
>>In addition to our AFR op ed, see our earlier op ed on the COALition's latest attempt to derail the energy transition and foment the climate wars first published in Renew Economy.
>> See our Budget submission, written with Blair Palese and the Climate Capital Forum
AUSTRALIA’S CLEANTECH SUPERPOWER OPPORTUNITY ON ABC 7.30
Tim Buckley joined Professors Rod Sims and Ross Garnaut of The Superpower Institute in a brilliant feature report from Laura Tingle on ABC 7.30 detailing Australia's generational opportunity to establish itself as an exporter of embodied decarbonisation, that is, to use our superabundance of low-cost renewables to manufacture and process our world-leading reserves of critical minerals, metals and energy transition materials onshore pre-export, e.g. green iron.
This is increasingly critical as growing momentum around carbon tariffs in export markets will penalise high-carbon goods. Another reason to support the Carbon Solutions Levy (CSL) proposed by Professors Garnaut and Sims – keep the tax revenue here to invest in the clean energy transition, as Twiggy also powerfully argued in supporting a CSL at his Press Club address, as did Dr Alan Finkel in his ‘Banana in the Room’ speech to the Universities Australia Solutions Summit this week.
Every dollar of carbon emissions tax – regulated, economy wide and ratcheting up progressively – is an extra dollar of revenue to the government to help fund the decarbonisation pivot that will transform our economy, and to offset the energy price crisis inflicted on Australians by the fossil fuel cartel. This works nicely in conjunction with Australia’s support of a North Asia Carbon Border Adjustment Mechanism (CBAM) responding to the EU CBAM.
A CSL would provide the price signal and regulatory clarity needed to drive decarbonisation of trade exposed industries, underpinning on-shore value-adding of our world leading critical minerals and strategic metals with refineries and manufacturing powered by renewable energy.
A great example is Rio Tinto’s groundbreaking announcement this month of two 25 year power purchasing agreements (PPAs) that will underwrite Australia’s biggest ever wind and solar projects, supplying clean, green power to its alumina and aluminium smelting and refining operations in Gladstone, QLD.
BHP, where the bloody hell are you?! We need Australia’s largest firm to move with a similar level of ambition as Rio Tinto, or better still, Fortescue.
CLIMATE INTEGRITY LACKING IN BIG CORPORATES: NEW REPORT
A new report launched by the recently established Climate Integrity group, which aims to close the gap between emissions reduction pledges and credible action, reveals the epic failure of credible, capital-allocated corporate transition planning.
The report analysed 10 firms considered to be the top emitters in their sector – Coles and Woolworths, Telstra, Rio Tinto and South32, Qantas, BlueScope, Origin and AGL, and Cleanaway – against the principles of the November 2022 by the United Nations High Level Expert Group.
It finds “no company has a fully comprehensive, quantified, capital-allocated and independently verified plan for reducing emissions in line with a scientific pathway” and that “less than half are fully on track to meet their own targets”. The assessment concluded that the corporates’ net zero pledges “lacked scientific rigour”, and that they all “lagged behind global best practice”.
Not good enough.
>>Read our write up, ‘New report finds epic failure of credible, capital-allocated corporate transition planning’ by Nishtha Aggarwal and Annemarie Jonson
BCA WANTS TO DELAY CLIMATE DISCLOSURES
The Business Council of Australia this week demanded a 12 month delay to Treasury's mandatory climate disclosures regime, due to start July 1 for companies with turnover of $500 million, completely ignoring the urgency of the climate crisis. Let’s hope this is not a return to the bad old days ahead of the 2019 election, when the BCA called the ALP’s 45% emissions reduction by 2030 target “economy-wrecking”, helping to prolong the tenure of the climate-destroying LNP government.
The new legislation is already facing a 6-month delay to the proposed enforcement date due to the Parliamentary sitting schedule, and a modified liability clause provides safe harbour from civil society litigation for 3 years on certain aspects of reporting. This is more than sufficient.
The EU has been acting on the climate science for 1-2 decades, and has a fully functioning EU Emissions Trading Scheme providing a high regulated price on carbon emissions, something Australia’s government overturned a decade ago. After a decade of delay, Australia needs to start acting with urgency. Climate disclosures are critical for credible capital allocation decisions for Australian and global investors to align with the Government’s sector decarbonisation pathways and the Australian sustainable finance taxonomy, both due for release this year.
Perfection should not be allowed to be the enemy of progress. Investors need information to be roughly right and sectorally comparable, as opposed to precisely wrong.
In other news…
As Daniel Bleakley writes in The Driven, a new report from the Australian Renewable Energy Agency (ARENA) has found that a fleet of EVs used to supply Frequency Control Ancillary Services (FCAS) to the National Energy Market (NEM) could generate revenue of up to $12,000 per vehicle in a single year.
Tim Buckley says the new study’s findings about the massive opportunity ahead for vehicle to grid (V2G) technologies can’t be overstated, obviously noting that this FCAS value would quickly be arbitraged away as 1000GWh of collective EV batteries come progressively online. With the right price signal to consumers, behaviour change is entirely feasible, and EVs will be a key part of the grid reliability solutions needed, along with Commercial & Industrial Demand Side Participation (DSP), as Stephanie Bashir at Nexa Advisory’s new NSW Report highlights.
SMART ENERGY COUNCIL CONFERENCE 6-7 MARCH 2024 SYDNEY
You can hear from CEF experts and colleagues in the Climate Capital Forum at the Smart Energy
Council’s conference and expo in Sydney next month. Registration is free, with an excellent program of speakers.
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Annemarie for Tim, Paul, Nishtha, Matt, Xuyang and Amanda (see more on our team here).
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This newsletter is not intended to provide, and should not be relied on for, tax, legal, investment or accounting advice, nor is it an offer or solicitation of an offer to buy or sell, a recommendation, endorsement, or sponsorship of any security, company, or fund. CEF is not responsible for any investment decision made by you. Unless attributed to others, any opinions expressed are our current opinions only. Certain information presented may have been provided by third parties. CEF believes that such third- party information is reliable, and has checked public records to verify it wherever possible, but does not guarantee its accuracy, timeliness or completeness; and it is subject to change without notice.
