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      Policy & Regulation — 5 mins read

      What does the Federal Election mean for Energy Policy?

      With the Coalition finally committed to net zero emissions by 2050, it has rolled the dice for next year’s federal election – likely to be held in May.

      Yet Prime Minister Scott Morrison is declining to legislate the 2050 target, or raise the Paris Agreement goal of 26-28% emissions reduction on 2005 levels by 2030.

      It will be hard to achieve net zero without specific targets to aim for along the way. The federal government has always taken an ambivalent approach to renewable energy, with some Nationals and right-wing Liberal MPs still backing coal and gas generation, along with fossil fuel mining and exports.

      However, every Australian state and territory already has a net zero target in place, raising hope for a bipartisan approach to energy policy going forward.

      Will an increasingly climate-conscious electorate endorse the Coalition when polling booths open in 2022 - or take a punt on the greener, but unproven offerings of Labor, Greens and independent candidates?

      Coalition wedged by opposing energy forces

      Heading into the 2022 federal election, the Coalition faces vigorous challenges on both sides.

      The prime minister must appease populist right-wingers like Pauline Hanson, Clive Palmer and Barnaby Joyce-style Nationals, with their pro-coal messages. He also wants to bolster the Queensland mining electorates which helped him over the line in 2019.

      On the other hand, he must shore up Liberal MPs in a host of precarious inner-city seats, where strong independent candidates are campaigning on renewable energy tickets designed to appeal to green-leaning voters in seats which were once firmly Liberal.

      Stuck in the middle, as the AFR reports, the prime minister is building his message on a ‘technology, not taxes’ platform that he hopes will satisfy every kind of voter, helping the Coalition to hang on to power.*

      The federal government claims that adoption of new technologies like green hydrogen, carbon capture and electric vehicles (EVs) will help Australia reach net zero by 2050, without the need for a carbon tax.

      This scenario assumes that business will adopt a voluntary carbon price of $24 per tonne, the AFR reports. Energy and Emissions Reduction Minister Angus Taylor claims that, without a ‘technology’ approach, Labor will be forced to introduce a $400 per tonne carbon tax in order to achieve net zero by 2050.

      This, he said, would slash investment in Australia, reduce productivity and cut national income and economic activity by 0.9%.

      While hydrogen and carbon capture form central planks of Coalition policy – and both receive significant government funding support – they are still works in progress. Neither industry has yet proved to be commercially viable and cost-effective at scale.

      For this reason, the Coalition is backing gas-fired generation as a transitional fuel. In 2021, it invested $600 million to build a 660MW open-cycle gas turbine in the NSW Hunter Valley.*

      ALP hopes to slip in under the radar

      Labor, meanwhile, is desperate for re-election after eight years in the wilderness. Leader Anthony Albanese is treading a similar line between climate action and the need to utilise gas and coal in provision of baseline electricity, when solar and wind power are offline.

      The party’s target of 43% emissions reduction by 2030 now has the backing of The Business Council of Australia. In a startling about-turn, the group representing some of Australia’s most influential businesses is endorsing a target which – before the 2019 election – it condemned as 'economy wrecking'.

      While this lends the ALP a certain respectability, Labor leader Anthony Albanese wants to avoid the renewable over-reach which cost former leader Bill Shorten the 2019 election. His $20 billion plan to upgrade the east coast power grid has already come under fire for allegedly overstating policy savings.*

      In terms of electric vehicles (EVs), the same pattern emerges. The Coalition is investing $178 million in EV infrastructure and grid integration, while Labor is offering a $251 million investment which includes discounts and tax incentives to increase uptake.

      Yet Labor policy is still modest, with the party determined not to ‘end the weekend’ for ute-loving voters, as per Coalition accusations at the last election. The ALP has also ruled out any future alliance with the Greens, to avoid making it an obvious government target.

      The growing power of the independents

      In the event of a hung Parliament, independent votes are likely to hold the balance of power when future energy policy is decided.

      Running on climate, gender and integrity tickets, independents are serious contenders in Goldstein (Zoe Daniel), Hume (Penny Ackery), Wentworth (Allegra Spender) and Flinders (Despi O’Connor), among other key electorates. Backed by a $3.6 million fund put forward by activist group Climate 200, they are keen to tap into community disaffection with the major parties.

      It remains to be seen how successful they will be, and how much power they will wield following the 2022 election – still very much an unknown quantity.

      Wendy Riley, Energy Insights

      Energy Monthly

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      March 25, 2024 | Sheraton Grand Sydney Hyde Park

      Australian Domestic Gas Outlook 2024

      June 11, 2024 | Melbourne Convention and Exhibition Centre

      Australian Energy Week 2024

      New call-to-action