Thank you to CEDA for the opportunity to speak at this event.

I always relish the chance to talk to leaders from government and private sector companies about forging pathways toward net zero.

The Australian Government is committed to achieving net zero emissions as soon as possible, and preferably by 2050.

We are taking practical action to achieve that goal. 

We are doing everything we can to support businesses to reduce their emissions in a manner that doesn’t compromise their competitiveness. 

It’s at the heart of the government’s ‘technology not taxes’ approach; an approach that centres on reducing emissions without imposing new financial burdens.

Because climate change is a global problem, we need to make net zero practically achievable for all countries.

So we are focused on getting low emissions energy sources to commercial parity with high-emitting alternatives.

Once this happens, countries won’t have to choose between growth and decarbonisation.

Our plan

Guided by the Technology Investment Roadmap, the government will invest over $20 billion in low emissions technologies in the decade to 2030.

This will drive more than $80 billion in total public and private investment and support an estimated 160,000 jobs. 

We see enormous potential in technologies like clean hydrogen, carbon capture and storage, soil carbon sequestration and biofuels to reduce emissions – and importantly we see great economic and employment opportunities for Queensland. 

To date, we have already invested more than $11.2 billion into more than 822 clean energy projects with a total value of more than $39 billion. 

Our investments are supporting new jobs, reducing power prices and improving the reliability of our electricity grid.

The roadmap puts in place a framework for strategic investments in new and emerging low emissions technologies. 

Annual Low Emissions Technology Statements – or L.E.T.S - will be released under roadmap. 

L.E.T.S 2020 was the first milestone under the roadmap.

It identified Australia’s big technology opportunities, introducing 5 initial priority low emissions technologies and accompanying economic stretch goals.

They are:

• clean hydrogen production at less than $2 per kilogram
• long duration energy storage, to firm wind and solar at today’s wholesale electricity prices
• low emissions steel under $900 per tonne and low emissions aluminium under $2,700 per tonne
• sequestration from carbon capture and storage down to less than $20 per tonne, and
• soil carbon measurement at less than $3 per hectare per year.

LETS 2021, the second statement under the roadmap, will be released in the near future.

International collaboration

International collaboration is crucial to the Morrison Government’s commitment to low-emissions technologies.

Working with international partners will help us to attract investment, build supply chains, and benefit from innovation.

We have committed $565.8 million to supporting international partnerships on low emissions technology.

And our former Chief Scientist, Dr Alan Finkel, in his current role as Special Adviser on Low Emissions Technology, is leading our efforts to attract international investment in these energy technologies.

We have a $30 million low emissions partnership with Singapore.

This will support the demonstration and commercialisation of low emissions technologies including clean hydrogen and ammonia in maritime shipping and port operations. 

It is part of ongoing cooperation with Singapore under a MoU on low-emissions technologies and solutions signed between our governments last year. 

We have signed a new Hydrogen Accord with Germany, which will see a combined investment of approximately $130 million for the HyGATE Program.

We also have a partnership on low emissions solutions with Japan, and the United Kingdom, and are working towards partnerships with the Republic of Korea and India.

We want to attract and drive even more international investment into our regional communities off the back of hydrogen – and we expect Queensland to be a big part of this. 

Key to this will be our recently announced $464 million Clean Hydrogen Industrial Hubs program.

This program will support the development of up to seven hubs across regional Australia and international partnerships will be key to the industry’s success. 

By co-locating hydrogen producers and users, the hubs will be focal points for demand and central to building a thriving Australian industry. 

The prospective locations across Australia all have the potential to be world leading, with ample natural resources and skilled workforces already in place.

For Queensland, this includes Gladstone which has strong industry interest and ample resources to foster a thriving hydrogen sector. 

Townsville, McKay and north Queensland will also be important to Australia’s future hydrogen industry. 

Flexibility is key

A reliable, affordable energy supply is key to underpinning the competitiveness of our business and industries, our recovery from COVID and Australia’s continued economic success story.

Australia is a world leader in renewables. While one in four Australians have rooftop solar, this is even higher in Queensland, with more that 4,000 MW installed in the state, and 1,700 MW of that installed in the last year alone. 

Around 40 per cent of homes in Queensland – almost 1 in two households, now have rooftop solar panels.

When it comes to renewables; the achievements are extraordinary but the challenge is every bit as significant.

The key to this is balance, and it is why we have focused on securing dispatchable supply for the market.

This is critical to keep the lights on and prices low as more and more renewables are added to the grid. 

The Government, through Snowy Hydro, is on track to deliver the largest energy storage project in the Australia through Snowy 2.0, and a new gas generator at Kurri Kurri in the Hunter Valley to replace the exiting Liddell power station. 

These strategic investments, along with support for projects like the Kidston Pumped Hydro Project, and the Copperstring transmission line are designed to support reliability and develop a pipeline of dispatchable projects we will need in coming years.

As a country, we cannot afford to become complacent however.  

We have seen what happens if policy makers and industry take reliability and affordability for granted in the energy market. 

In the UK, reliance on gas imports, constrained gas supplies and a prolonged wind drought have plunged the country into an extraordinary energy crisis.

Default household energy prices have been increased by 12%.

Manufacturers have been forced to make a tough choice between bearing the cost of surging energy prices or bearing the loss of suspending production.

This comes on the back of the disaster earlier this year in Texas.

Here in Australia, from late May through to mid-July in Queensland and NSW we had a small glimpse of what happens to the energy market when reliable capacity exits early or without replacement

Coal outages in NSW, coinciding with the incident at Callide in Queensland, drove prices across the NEM from $37 a megawatt hour in the first quarter of 2021 to $95.

The half hour spot price exceeded $5,000 more than 20 times – the first time since 2010 that any spot price was over $5000 in a second quarter.

This was more pronounced in Queensland, where prices averaged $128 – the highest quarter 2 on record.

But since this capacity has come back on line, prices have eased significantly, to $51 in Queensland in September.

This shows why it is critical that as more renewable capacity is added to the grid, we must not prematurely lose dispatchable supply before it is adequately replaced by new dispatchable capacity, like gas and pumped hydro. 

The Australian Energy Market Operator estimates we will need up to 19,000 megawatts of on-demand, dispatchable power by 2040 to support the increasing amount of renewables in the system. 

However, we are a long, long way from seeing enough of the investment in firm power that we need to keep the grid affordable and secure. 

While 13,300 megawatts of new renewables added to the grid in the last two years, only 235 megawatts of new dispatchable projects came online. A ratio of 56:1.

National Cabinet’s decision to implement major market reforms was a major step forward in dealing with the challenges we face – and I thank Queensland Energy Minister Mick de Brenni for his constructive work with the Commonwealth on this. 

This includes reforms to safely integrate growing distributed energy resources, like rooftop solar, measures to procure essential system services and to progress cost-effective transmission development.

However, most critically, this includes reforms to ensure we have adequate generation resources, with the key measure to progress detailed design of a capacity mechanism.

This is a technology neutral way to value reliability, incentivise missing private sector investment in new dispatchable generation and ensure existing generators don’t shut down early if they are still needed. 

This reform, which could deliver $1.3 billion in benefits for consumers, won’t come at the expense of getting more renewables into the grid.  

In fact, Australia is deploying new renewable capacity – particularly solar – faster than almost any other major economy in the world. 

But if we are going to reach the amount of on-demand, dispatchable power called for by AEMO to support growing renewables when the sun doesn’t shine and the wind doesn’t blow, we have to get the market settings right. 

Along with providing a form of reliable generation, gas is also critical for growing our manufacturing sector and economy more broadly.  

Gas makes up 42 per cent of manufacturing’s total energy use according to the latest Australian Energy Statistics.

Liquefied natural gas makes up over 16 per cent of our resources and energy commodities’ export value. Australia’s LNG export earnings are forecast to increase from $30 billion in 2020–21 to $56 billion in 2021–22.

Getting more gas out of the ground is key to bolstering our supplies and placing downward pressure on prices. 

Queensland’s local gas supply will play a key role in the Government’s gas-fired recovery, being home to some of our key basins and gas infrastructure. 

For example, the Government is focused on bolstering the capacity of the Wallumbilla Gas Hub and has delivered the second of our Strategic Basin Plans focusing on the North Bowen and Galilee basins. 

We will continue to work with the Queensland Government to ensure we can unlock supply and ensure Australian gas is working for all Australians. 

Conclusion

Thank you again for the chance to speak at this event.

I’ll leave you with this: some in this debate think net zero means zero. It doesn’t. 

Net zero is not zero. It is not zero emissions.

For a country like Australia, this is the difference between destroying some of our greatest economic strengths versus defending and even strengthening them. 

It’s the difference between abandoning exports that underpin our regions, and supporting them.

It’s the difference between giving big parts of agriculture, heavy manufacturing and resources no future and a bright future.

Our government will always stand up for our traditional industries, and their crucial ongoing role in underpinning our economy and reducing emissions.

As I’ve outlined, we are committed to reducing emissions across Australia by driving innovation and technology.

The best way to do this is without imposing new costs that would hurt businesses or destroy jobs.

And this is precisely what we’re doing.

Meanwhile, we remain on track to exceed our 2030 emissions reduction target of 26-28 per cent below 2005 levels.

There's certainly a lot of work to be done – but I have every confidence that, through sustained effort and collaboration, with states like Queensland and the business community, we can keep reaching our targets.

Thank you.