The Morrison Government has handed down the 2020-21 Budget containing significant items for the energy sector, with funding to drive energy affordability and reliability, and initiatives to support emissions reduction.
The Federal Treasurer, Josh Frydenberg, has delivered the Federal Budget at a crucial time for Australians as we collectively seek a pathway to economic recovery amid the COVID-19 pandemic. Among the initiatives outlined within the budget, $2.47 billion in funding has been allocated to energy initiatives. Of this, the majority is earmarked for technology programs designed to support emissions reductions, as well as investment in electricity, fuel security and gas.
In his Budget statement, Minister for Energy and Emissions Reduction, Angus Taylor, said: “Our 2020-21 Budget initiatives will help to lock in lower energy prices while simultaneously developing the backbone of a reliable, lower emissions National Electricity Market (NEM) for the next decade and beyond.”
We look here at some of the major Budget items that relate to the energy industry and that have potential implications for businesses.
Technology to drive emissions reduction
During his Budget speech, Josh Frydenberg announced almost $2 billion in new funding as part of the Government’s “energy plan to support low emissions and renewable technologies, helping to lower emissions and address climate change.” Some of these measures include:
- $1.4 billion over 10 years to continue funding the Australian Renewable Energy Agency (ARENA) to accelerate research and development for new and emerging low emissions technologies.
- $95.4 million for a Technology Co-Investment Fund to support businesses in the manufacturing, industrial, transport and agricultural sectors invest in low emissions technologies.
- $74.5 million over four years to enable Australian consumers and businesses to invest in future fuel and vehicle technologies in Australia, including hydrogen, electric, and bio-fuelled vehicles.
- $45.2 million to progress reforms to make it easier and cheaper for business to participate in the Emissions Reduction Fund, and to support investment in offshore clean energy generation and transmission.
More reliable and affordable energy
The Government has allocated funding to lower energy costs for businesses, invest in dispatchable generation and provide greater grid security. Some of these measures include:
- Up to $250 million to accelerate major transmission projects such as Marinus Link, Project EnergyConnect and VNI West to the next stage.
- $67.1 million to further develop the Regional and Remote Communities Reliability Fund to support feasibility studies for microgrid projects in regional areas.
- $52.2 million to improve energy efficiency, lower bills and deliver abatement, including $24 million to fund building upgrades and reduce energy costs for community groups and small and medium hotels.
- Announced ahead of the Budget, the Government will invest $28.5 million via the South West Interconnected System Big Battery project and a WA-based microgrids program for remote and indigenous communities.
- Delta Electricity’s Vales Point Power Station will receive an upgrade to reduce emissions, improve reliability and provide additional dispatchable generation in New South Wales.
Other energy initiatives
The Government is also seeking to invest in Australia’s long-term fuel security and deliver a “gas-fired recovery”. Related initiatives include:
- $250.7 million investment in new diesel fuel storage facilities and progressing reforms to boost the resilience of fuel supply and support local refineries.
- In addition to the $42 million of investments to unlock gas supply, $10.9 million will be invested to strengthen gas infrastructure planning and deliver market reform to lower the price of gas for households and manufacturers.
“ We look forward to more information being released on elements that are going to support our business clients, specifically in the hospitality and commercial property sector, as well as assistance to commercial energy users in regional areas” states Andy Young, our General Manager of Business Services.
In particular, the Technology Co-Investment Fund, the Emissions Reduction Fund and the Regional and Remote Communities Reliability Fund are of interest to us. As we get further information on the direct effect these will have on our clients, we will be giving further updates.
For a further break down on the Federal budget, refer to an article published by the Energy Efficiency Council where Rob Murray-Leach and Katie Bartrop explain what it means for the energy management sector here.
You can access the full Federal Budget papers here. Speak to Energy Action for more details about how these initiatives impact your business.