Key emerging issues in the energy sector include:
■ securing and maintaining affordable mobility while reducing greenhouse emissions;
■ improving fuel security;
■ minimising the costs of transition to new/ changing fuel sources; and
■ supporting a shift to renewables for both the stationary (e.g. generation) and transport sectors, including creating certainty to support renewables investment.
The energy sector currently accounts for a substantial proportion of Australia's greenhouse gas emissions, with electricity accounting for one third.244 Pressures to transition to a lower emission environment while maintaining economic growth, whether from domestic policies or international obligations, will need careful management.
Achieving material emission reductions will require action by infrastructure owners, developers and managers and can best be achieved by using markets to promote more efficient use of existing infrastructure.
Uncertainty around climate policy, either globally or locally, increases risk in the Australian energy sector. Uncertainty leads to project delays, reduced investor confidence and postponed asset retirements. The Council of Australian Governments (COAG) Energy Council meeting communiqué on 11 December 2014 stressed the importance of bipartisan emissions and RET policies.245
Audit finding 63. Lack of certainty on national and international approaches to dealing with climate change directly affects investment in the energy sector. |
The Audit has identified a changing demand structure across the electricity and gas markets. There are several regulatory issues that will need to be further considered:
■ further retail energy pricing deregulation;
■ support for retail competition and the removal of price controls where sufficient levels of competition are met; and
■ streamlining the assessment process for major infrastructure projects.
These issues will align with Infrastructure Australia's broad principles for open markets and effective regulatory oversight (where it is necessary).
_________________________________________________________________________________
244. Department of the Environment (2015)
245. Council of Australian Governments Energy Council (2014)