At the beginning of April, Josh Frydenberg handed down his first Budget as Federal Treasurer, outlining a range of energy-related initiatives expected to share centre stage with other key policy areas ahead of the impending election in May.
Within the 2019/20 Federal Budget announcement, the Morrison Government sought to draw the battle lines for the upcoming election on significant energy policy issues. In addition to funding for its $3.5 billion climate and energy initiative – known as the Climate Solutions Fund - $1.88 billion was earmarked to reduce energy prices, and secure supply, for a range of Australian energy users.
From efficiency measures to grant schemes, there was a range of initiatives that have the potential to impact commercial energy users. We provide a snapshot of the most relevant items for businesses here.
Funding Snowy Hydro 2.0: A centerpiece to the Government’s efforts to drive down costs and increase supply was investing $1.38 billion in Snowy 2.0. Minister for Energy, Angus Taylor said in a statement that this is intended to “support new renewable energy for Australia's future energy mix to deliver affordable, reliable power.”
Energy efficiency: $79.2 million was pledged over six-years to improve energy efficiency standards and programs to lower energy costs for businesses and other users. As part of this, $50 million in grants will be available to eligible companies and community organisations through the Energy Efficient Communities Program. These funds are expected to support the installation of new equipment and reviewing and improving energy management.
Under the scheme, eligible small businesses energy consumers will be able to claim grants of up to $20,000. Higher volume energy consumers can access up to $25,000 and community groups up to $12,500. Mr Taylor also suggested that small businesses can consider matching this using the instant asset write off scheme.
Marinus Link Project: The Government is seeking to provide $56 million in funding for Tasmania’s Marinus Link project, the second interconnector between Tasmania and Victoria. This funding is expected to support the development of additional hydro capacity and provide sustainable, lower cost power for energy consumers.
Supporting micro-grids: Just over $50 million was earmarked to support feasibility studies into micro-grids that can power regional communities. Mr Taylor said that this includes “off-grid and ‘edge of electricity grid’ areas where local distributed generation and demand management is used to ensure supply.”
Further energy-related items: The Budget also covered a range of initiatives in the commercial real estate sector, including expanding the National Australian Built Environment Rating System (NABERS) to improve and increase energy efficiency and a review of the Commercial Building Disclosure (CBD) program to expand it to more high-energy use buildings.
To assist in managing gas prices, the Government allocated $8.4 million in funding for gas exploration projects, specifically for the development of the Beetaloo sub-basin in the Northern Territory.
In the lead up to the election, the Labour Party and other political parties are positioning alternative solutions to the energy policy issues invoked within the Federal Budget and related Morrison Government announcements. The long-running debate about Australia’s energy future will remain a central theme during the pre-election campaign period, with the ultimate impact on energy users as yet unknown.