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The
energy policy Energy policy is the manner in which a given entity (often governmental) has decided to address issues of energy development including energy conversion, distribution and use as well as reduction of greenhouse gas emissions in order to contri ...
of
Australia Australia, officially the Commonwealth of Australia, is a Sovereign state, sovereign country comprising the mainland of the Australia (continent), Australian continent, the island of Tasmania, and numerous List of islands of Australia, sma ...
is subject to the regulatory and fiscal influence of all three levels of government in Australia, although only the State and Federal levels determine policy for primary industries such as coal. Federal policies for
energy in Australia Energy in Australia is the production in Australia of energy and electricity, for consumption or export. Energy policy of Australia describes the politics of Australia as it relates to energy. Australia is a net energy exporter, and was the ...
continue to support the
coal mining Coal mining is the process of extracting coal from the ground. Coal is valued for its energy content and since the 1880s has been widely used to generate electricity. Steel and cement industries use coal as a fuel for extraction of iron from ...
and natural gas industries through subsidies for fossil fuel use and production. Australia is the 10th most coal-dependent country in the world. Coal and natural gas, along with oil-based products, are currently the primary sources of Australian energy usage and the coal industry produces over 30% of Australia's total
greenhouse gas emissions Greenhouse gas emissions from human activities strengthen the greenhouse effect, contributing to climate change. Most is carbon dioxide from burning fossil fuels: coal, oil, and natural gas. The largest emitters include coal in China and lar ...
. In 2018 Australia was the 8th highest emitter of greenhouse gases per capita in the world. Australia's energy policy features a combination of
coal Coal is a combustible black or brownish-black sedimentary rock, formed as rock strata called coal seams. Coal is mostly carbon with variable amounts of other elements, chiefly hydrogen, sulfur, oxygen, and nitrogen. Coal is formed when dea ...
power stations and
hydro electricity Hydroelectricity, or hydroelectric power, is electricity generated from hydropower (water power). Hydropower supplies one sixth of the world's electricity, almost 4500 TWh in 2020, which is more than all other renewable sources combined and ...
plants. The Australian government has decided not to build
nuclear power Nuclear power is the use of nuclear reactions to produce electricity. Nuclear power can be obtained from nuclear fission, nuclear decay and nuclear fusion reactions. Presently, the vast majority of electricity from nuclear power is produced b ...
plants, although it is one of the world's largest producers of uranium.


Electricity generation


History and governance

After
World War II World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the vast majority of the world's countries—including all of the great powers—forming two opposin ...
, New South Wales and Victoria started connecting the formerly small and self-contained local and regional power grids into statewide grids run centrally by public statutory authorities. Similar developments occurred in other states. Both of the industrially large states cooperated with the Commonwealth in the development and interconnection of the
Snowy Mountains Scheme The Snowy Mountains Scheme or Snowy scheme is a hydroelectricity and irrigation complex in south-east Australia. The Scheme consists of sixteen major dams; nine power stations; two pumping stations; and of tunnels, pipelines and aqueducts that ...
. Rapid economic growth led to large and expanding construction programs of coal-fired power stations such as black coal in New South Wales and brown coal in Victoria. By the 1980s complex policy questions had emerged involving the massive requirements for investment, land and water. Between 1981 and 1983 a cascade of blackouts and disruptions was triggered in both states, resulting from generator design failures in New South Wales, industrial disputes in Victoria, and drought in the storages of the Snowy system (which provided essential peak power to the State systems). Wide political controversy arose from this and from proposals to the New South Wales Government from the
Electricity Commission of New South Wales The Electricity Commission of New South Wales, sometimes called Elcom, was a statutory authority responsible for electricity generation and its bulk transmission throughout New South Wales, Australia. The commission was established on 22 May 1950 ...
for urgent approval to build large new stations at Mardi and Olney on the Central Coast, and at other sites later. The Commission of Enquiry into Electricity Generation Planning in New South Wales was established, reporting in mid-1985. This was the first independent enquiry directed from outside the industry into the Australian electricity system. It found, among other matters, that existing power stations were very inefficient, that plans for four new stations, worth then about $12 billion, should be abandoned, and that if the sector were restructured there should be sufficient capacity for normal purposes until the early years of the 21st century. This forecast was achieved. The Commission also recommended enhanced operational coordination of the adjoining State systems and the interconnection in eastern Australia of regional power markets. The New South Wales Enquiry marked the beginning of the end of the centralised power utility monopolies and established the direction of a new trajectory in Australian energy policy, towards decentralisation, interconnection of States and the use of markets for coordination. Similar enquiries were subsequently established in Victoria (by the Parliament) and elsewhere, and during the 1990s the industry was comprehensively restructured in southeastern Australia and subsequently corporatised. Following the report by the Industry Commission on the sector moves towards a national market developed. The impetus towards system-wide competition was encouraged by the Hilmer recommendations. The establishment of the
National Electricity Market The National Electricity Market (NEM) is an arrangement in Australia's electricity sector for the connection of the electricity transmission grids of the eastern and southern Australia states and territories to create a cross-state wholesale elec ...
in 1997 was the first major accomplishment of the new Federal/State cooperative arrangements under the Council of Australian Governments. The governance provisions included a National Electricity Code, the establishment in 1996 of a central market manager, the National Electricity Market Management Company ( NEMMCO), and a regulator, National Electricity Code Administrator (NECA). Following several years experience with the new system and several controversies an
energy market Energy markets are national and international regulated markets that deal specifically with the trade and supply of energy. Energy market may refer to an electricity market, but can also refer to other sources of energy. Typically energy developm ...
reform process was conducted by the Ministerial Council on Energy. As a result, beginning in 2004, a broader national arrangement, including electricity and gas and other forms of energy, was established. These arrangements are administered by a national regulator, the
Australian Energy Regulator The Australian Energy Regulator (AER) is the regulator of the wholesale electricity and gas markets in Australia. It is part of the Australian Competition & Consumer Commission and enforces the rules established by the Australian Energy Market C ...
(AER), and a market rule-making body, the
Australian Energy Market Commission The Australian Energy Market Commission (AEMC) was set up by the Council of Australian Governments through the Ministerial Council on Energy in 2005. The AEMC was established by the ''Australian Energy Market Commission Establishment Act 2004'' ...
(AEMC), and a market operator, the Australian Energy Market Operator (AEMO). Over the 10 years from 1998–99 to 2008–09, Australia's electricity use increased at an average rate of 2.5% a year. In 2008–09, a total of of electricity (including off-grid electricity) was generated in Australia. Between 2009 and 2013 NEM energy usage had decreased by 4.3% or almost .


Coal-fired power

The main source of Australia's electricity generation is coal. In 2003, coal-fired plants produced 58.4% of the total capacity, followed by hydropower (19.1%, of which 17% is
pumped storage Pumping may refer to: * The operation of a pump, for moving a liquid from one location to another **The use of a breast pump for extraction of milk * Pumping (audio), a creative misuse of dynamic range compression * Pumping (computer systems), the ...
), natural gas (13.5%), liquid/gas fossil fuel-switching plants (5.4%), oil products (2.9%), wind power (0.4%), biomass (0.2%) and solar (0.1%). In 2003, coal-fired power plants generated 77.2% of the country's total electricity production, followed by natural gas (13.8%), hydropower (7.0%), oil (1.0%), biomass (0.6%) and solar and wind combined (0.3%).OECD/IEA, p. 95 The total generating capacity from all sources in 2008-9 was approximately with average capacity utilisation of 52%. Coal-fired plants constituted a majority of generating capacity which in 2008-9 was . In 2008–9, a total of of electricity was produced from black coal and from brown coal. Depending on the cost of coal at the power station, the long-run marginal cost of coal-based electricity at power stations in eastern Australia is between 7 and 8 cents per kWh, which is around $79 per MWh.


Hydroelectric power

Hydroelectricity accounts for 6.5–7% of NEM electricity generation.(17 April 2007)
How solar ran out of puff
''Sydney Morning Herald''.
The massive
Snowy Mountains Scheme The Snowy Mountains Scheme or Snowy scheme is a hydroelectricity and irrigation complex in south-east Australia. The Scheme consists of sixteen major dams; nine power stations; two pumping stations; and of tunnels, pipelines and aqueducts that ...
is the largest producer of
hydro-electricity Hydroelectricity, or hydroelectric power, is electricity generated from hydropower (water power). Hydropower supplies one sixth of the world's electricity, almost 4500 TWh in 2020, which is more than all other renewable sources combined and ...
in eastern
Victoria Victoria most commonly refers to: * Victoria (Australia), a state of the Commonwealth of Australia * Victoria, British Columbia, provincial capital of British Columbia, Canada * Victoria (mythology), Roman goddess of Victory * Victoria, Seychelle ...
and southern
New South Wales ) , nickname = , image_map = New South Wales in Australia.svg , map_caption = Location of New South Wales in AustraliaCoordinates: , subdivision_type = Country , subdivision_name = Australia , established_title = Before federation , es ...
.


Wind power

By 2015, there were 4,187 MW of installed wind power capacity, with another 15,284 MW either being planned or under construction. In the year to October 2015, wind power accounted for 4.9% of Australia's total electricity demand and 33.7% of total renewable energy supply. As at October 2015, there were 76 wind farms in Australia, most of which had turbines from 1.5 to 3 MW.


Solar power

Solar energy is used to heat water, in addition to its role in producing electricity through photovoltaics (PV). In 2014/15, PV accounted for 2.4% of Australia's electrical energy production. The installed PV capacity in Australia has increased 10-fold between 2009 and 2011, and quadrupled between 2011 and 2016.


Wave power

The Australian government says new technology harnessing
wave energy Wave power is the capture of energy of wind waves to do useful work – for example, electricity generation, water desalination, or pumping water. A machine that exploits wave power is a wave energy converter (WEC). Waves are generated by wind p ...
could be important for supplying electricity to most of the country's major capital cities. The Perth Wave Energy Project near Fremantle in Western Australia operates through several submerged buoys, creating energy as they move with passing waves. The Australian government has provided more than $US600,000 in research funding for the technology developed by Carnegie, a Perth company.


Nuclear power

Jervis Bay Nuclear Power Plant Jervis Bay Nuclear Power Plant was a proposed nuclear power reactor in the Jervis Bay Territory on the south coast of New South Wales. It would have been Australia's first nuclear power plant, and was the only proposal to have received serious ...
was a proposed
nuclear power reactor A nuclear reactor is a device used to initiate and control a fission nuclear chain reaction or nuclear fusion reactions. Nuclear reactors are used at nuclear power plants for electricity generation and in nuclear marine propulsion. Heat from ...
in the
Jervis Bay Territory The Jervis Bay Territory (; JBT) is an internal territory of Australia. It was established in 1915 from part of New South Wales (NSW), in order to give the landlocked Australian Capital Territory (ACT) access to the sea. It was administered b ...
on the south coast of New South Wales. It would have been Australia's first
nuclear power plant A nuclear power plant (NPP) is a thermal power station in which the heat source is a nuclear reactor. As is typical of thermal power stations, heat is used to generate steam that drives a steam turbine connected to a electric generator, generato ...
, and was the only proposal to have received serious consideration as of 2005. Some environmental studies and site works were completed, and two rounds of tenders were called and evaluated, but the Australian government decided not to proceed with the project. Queensland introduced legislation to ban nuclear power development on 20 February 2007. Tasmania has also banned nuclear power development. Both laws were enacted in response to a pro-nuclear position, by
John Howard John Winston Howard (born 26 July 1939) is an Australian former politician who served as the 25th prime minister of Australia from 1996 to 2007, holding office as leader of the Liberal Party. His eleven-year tenure as prime minister is the s ...
in 2006. John Howard went to the November 2007 election with a pro-nuclear power platform but his government was soundly defeated by Labor, which is opposed to nuclear power for Australia.


Geothermal

There are vast deep-seated granite systems, mainly in central Australia, that have high temperatures at depth and these are being drilled by 19 companies across Australia in 141 areas. They are spending A$654 million on exploration programs. South Australia has been described as "Australia's hot rock haven" and this emissions-free and renewable energy form could provide an estimated 6.8% of Australia's baseload power needs by 2030. According to an estimate by the Centre for International Economics, Australia has enough
geothermal energy Geothermal energy is the thermal energy in the Earth's crust which originates from the formation of the planet and from radioactive decay of materials in currently uncertain but possibly roughly equal proportions. The high temperature and pres ...
to contribute electricity for 450 years. The 2008 federal budget allocated $50 million through the Renewable Energy Fund to assist with 'proof-of-concept' projects in known geothermal areas.


Biomass

Biomass power Biomass is plant-based material used as a fuel for heat or electricity production. It can be in the form of wood, wood residues, energy crops, agricultural residues, and waste from industry, farms, and households. Some people use the terms biom ...
plants use crops and other vegetative by-products to produce power similar to the way coal-fired power plants work. Another product of biomass is extracting ethanol from sugar mill by-products. The GGAP subsidies for biomass include ethanol extraction with funds of $7.4M and petrol/ethanol fuel with funds of $8.8 million. The total $16.2M subsidy is considered a renewable energy source subsidy.


Biodiesel

Biodiesel is an alternative to fossil fuel diesel that can be used in cars and other internal combustion engine vehicles. It is produced from vegetable or animal fats and is the only other type of fuel that can run in current unmodified vehicle engines. Subsidies given to ethanol oils totaled $15 million in 2003–2004, $44 million in 2004–2005, $76 million in 2005–2006 and $99 million in 2006–2007. The cost for establishing these subsidies were $1 million in 2005–2006 and $41 million in 2006–2007. However, with the introduction of the Fuel Tax Bill, grants and subsidies for using biodiesel have been cut leaving the public to continue using diesel instead. The grants were cut by up to 50% by 2010–2014. Previously the grants given to users of ethanol-based biofuels were $0.38 per litre, which were reduced to $0.19 in 2010–2014.


Fossil fuels

In 2003, Australian total primary energy supply (TPES) was 112.6 million tonnes of oil equivalent (Mtoe) and total final consumption (TFC) of energy was 72.3 Mtoe.


Coal

Australia had a fixed
carbon price Carbon pricing (or pricing), also known as cap and trade (CAT) or emissions trading scheme (ETS), is a method for nations to reduce global warming. The cost is applied to greenhouse gas emissions in order to encourage polluters to reduce the co ...
of A$23 ($23.78) a tonne on the top 500 polluters from July 2012 to July 2014. Australia is the fourth-largest coal producing country in the world.
Newcastle Newcastle usually refers to: *Newcastle upon Tyne, a city and metropolitan borough in Tyne and Wear, England *Newcastle-under-Lyme, a town in Staffordshire, England *Newcastle, New South Wales, a metropolitan area in Australia, named after Newcastle ...
is the largest coal export port in the world. In 2005, Australia mined 301 million tonnes of
hard coal Anthracite, also known as hard coal, and black coal, is a hard, compact variety of coal that has a submetallic luster. It has the highest carbon content, the fewest impurities, and the highest energy density of all types of coal and is the high ...
(which converted to at least 692.3 million tonnes of co2 emitted) and 71 million tonnes of
brown coal Lignite, often referred to as brown coal, is a soft, brown, combustible, sedimentary rock formed from naturally compressed peat. It has a carbon content around 25–35%, and is considered the lowest rank of coal due to its relatively low heat ...
(which converted to at least 78.1 million tonnes of co2).) Coal is mined in every state of Australia. It provides about 85% of Australia's electricity production and is Australia's largest export commodity. 75% of the coal mined in Australia is exported, mostly to eastern Asia. In 2005, Australia was the largest coal exporter in the world with 231 million tonnes of hard coal. Australian black coal exports are expected by some to increase by 2.6% per year to reach 438 million tonnes by 2029–30, but the possible introduction of
emissions trading Emissions trading is a market-based approach to controlling pollution by providing economic incentives for reducing the emissions of pollutants. The concept is also known as cap and trade (CAT) or emissions trading scheme (ETS). Carbon emission t ...
schemes in customer countries as provided for under the
Kyoto protocol The Kyoto Protocol was an international treaty which extended the 1992 United Nations Framework Convention on Climate Change (UNFCCC) that commits state parties to reduce greenhouse gas emissions, based on the scientific consensus that (part ...
may affect these expectations in the medium term. Coal mining in Australia has become more controversial because of the strong link between the effects of global warming on Australia and burning coal, including exported coal, and
climate change In common usage, climate change describes global warming—the ongoing increase in global average temperature—and its effects on Earth's climate system. Climate change in a broader sense also includes previous long-term changes to E ...
,
global warming In common usage, climate change describes global warming—the ongoing increase in global average temperature—and its effects on Earth's climate system. Climate change in a broader sense also includes previous long-term changes to E ...
and
sea level rise Globally, sea levels are rising due to human-caused climate change. Between 1901 and 2018, the globally averaged sea level rose by , or 1–2 mm per year on average.IPCC, 2019Summary for Policymakers InIPCC Special Report on the Ocean and Cry ...
. Coal mining in Australia will as a result have direct impacts on
agriculture in Australia Although Australia is mostly arid, the nation is a major agricultural producer and exporter, with over 325,300 employed in agriculture, forestry and fishing as of February 2015. Agriculture and its closely related sectors earn $155 billion-a-y ...
, health and
natural environment The natural environment or natural world encompasses all life, living and non-living things occurring nature, naturally, meaning in this case not Artificiality, artificial. The term is most often applied to the Earth or some parts of Earth. Th ...
including the
Great Barrier Reef The Great Barrier Reef is the world's largest coral reef system composed of over 2,900 individual reefs and 900 islands stretching for over over an area of approximately . The reef is located in the Coral Sea, off the coast of Queensland, ...
. The
IPCC The Intergovernmental Panel on Climate Change (IPCC) is an intergovernmental body of the United Nations. Its job is to advance scientific knowledge about climate change caused by human activities. The World Meteorological Organization (WMO) a ...
AR4 Working Group III Report "Mitigation of Climate Change" states that under Scenario A (stabilisation at 450ppm) Annex 1 countries (including Australia) will need to reduce greenhouse gas emissions by 25% to 40% by 2020 and 80% to 95% by 2050. Many environmental groups around the world, including those represented in Australia, are taking direct action for the dramatic reduction in the use of coal as
carbon capture and storage Carbon capture and storage (CCS) or carbon capture and sequestration is the process of capturing carbon dioxide (CO2) before it enters the atmosphere, transporting it, and storing it (carbon sequestration) for centuries or millennia. Usually th ...
is not expected to be ready before 2020 if ever commercially viable.


Natural gas

In 2002, the Howard Government announced the finalisation of negotiations for a $25 billion contract with China for LNG.How Australia blew its future gas supplies
''
The Age ''The Age'' is a daily newspaper in Melbourne, Australia, that has been published since 1854. Owned and published by Nine Entertainment, ''The Age'' primarily serves Victoria (Australia), Victoria, but copies also sell in Tasmania, the Austral ...
'' 30 September 2017
The contract was to supply 3 million tonnes of LNG a year from the
North West Shelf Venture The North West Shelf Venture, situated in the north-west of Western Australia, is Australia's largest resource development project. It involves the extraction of petroleum (mostly natural gas and condensate) at offshore production platforms, o ...
off Western Australia, and was worth between $700 million and $1 billion a year for 25 years. The members of the consortium which operates the North West Shelf Venture are
Woodside Petroleum Woodside Energy Group Ltd (formerly Woodside Petroleum Ltd) is an Australian petroleum exploration and production company. Woodside is the operator of oil and gas production in Australia and also Australia's largest independent dedicated oil an ...
,
BHP BHP Group Limited (formerly known as BHP Billiton) is an Australian multinational mining, metals, natural gas petroleum public company that is headquartered in Melbourne, Victoria, Australia. The Broken Hill Proprietary Company was founded ...
, BP,
Chevron Chevron (often relating to V-shaped patterns) may refer to: Science and technology * Chevron (aerospace), sawtooth patterns on some jet engines * Chevron (anatomy), a bone * '' Eulithis testata'', a moth * Chevron (geology), a fold in rock ...
,
Shell Shell may refer to: Architecture and design * Shell (structure), a thin structure ** Concrete shell, a thin shell of concrete, usually with no interior columns or exterior buttresses ** Thin-shell structure Science Biology * Seashell, a hard o ...
and Japan Australia LNG. The price was guaranteed not to increase until 2031, and by 2015 China was paying "one-third the price for Australian gas that Australian consumers themselves had to pay." In 2007, there was another LNG deal with China worth $35 billion.Woodside signs China to biggest export deal yet
''Sydney Morning Herald''
The agreement was for the potential sale of 2 to 3 million tonnes of LNG a year for 15 to 20 years from the
Browse LNG The Browse LNG was a liquefied natural gas plant project proposed for construction at James Price Point, north of Broome on the Dampier Peninsula, Western Australia. It was considered by a joint venture including Woodside Petroleum, Shell, BP, ...
project, off Western Australia, of which Woodside is the operator. The agreement was expected to bring in total revenues of $35 billion to $45 billion. Succeeding governments oversaw other contracts with China, Japan and South Korea, but none have required exporters to set aside supplies to meet Australia's needs. The price of LNG has historically been linked to oil prices, but the true price, costs and supply levels are presently too difficult to determine. Santos GLNG Operations,
Shell Shell may refer to: Architecture and design * Shell (structure), a thin structure ** Concrete shell, a thin shell of concrete, usually with no interior columns or exterior buttresses ** Thin-shell structure Science Biology * Seashell, a hard o ...
and
Origin Energy Origin Energy an ASX listed public company with headquarters in Sydney. It is a major integrated electricity generator, and electricity and natural gas retailer. It operates Australia’s largest coal-fired power station at Lake Macquarie, New ...
are major gas producers in Australia.Prime Minister Malcolm Turnbull meets gas producers over predicted shortfalls
''The Age''
Australia Pacific LNG (APLNG), led by Origin Energy, is the largest producer of natural gas in eastern Australia and a major exporter of
liquefied natural gas Liquefied natural gas (LNG) is natural gas (predominantly methane, CH4, with some mixture of ethane, C2H6) that has been cooled down to liquid form for ease and safety of non-pressurized storage or transport. It takes up about 1/600th the volu ...
to Asia. Santos is Australia's second-largest independent oil and gas producer. According to the
Australian Competition & Consumer Commission The Australian Competition and Consumer Commission (ACCC) is the chief competition regulator of the Government of Australia, located within the Department of the Treasury. It was established in 1995 with the amalgamation of the Australian Tra ...
(ACCC), the demand for gas in the domestic east coast market is about 700 petajoules a year. Australia is expected to become the world's biggest LNG exporter by 2019, hurting supplies in the domestic market and driving up gas and power prices. In 2017 the Australian government received a report from the Australian Energy Market Operator and one from the ACCC showing expected gas shortages in the east coast domestic market over the next two years. The expected gas shortfall is 54 petajoules in 2018 and 48 petajoules in 2019. The federal government considered imposing export controls on gas to ensure adequate domestic supplies. The companies agreed to make sufficient supplies available to the domestic market until the end of 2019. On 7 September Santos pledged to divert 30 petajoules of gas from its Queensland-based Gladstone LNG plant slated for export into Australia's east coast market in 2018 and 2019.Santos diverts some gas slated for exports to shore up Australian supply
/ref> On 26 October 2017, APLNG agreed to increase gas to Origin Energy by 41 petajoules over 14 months, increasing APLNG's total commitment to 186 PJ for 2018, representing almost 30% of Australian east coast domestic gas market.
/ref> The price at which these additional supplies are to be made available has not been disclosed. On 24 August 2017,
Orica Orica Limited () is an Australian-based multinational corporation that is one of the world's largest providers of commercial explosives and blasting systems to the mining, quarrying, oil and gas, and construction markets, a supplier of sod ...
chief executive Alberto Calderon described gas prices in Australia as ridiculous, saying that prices in Australia were more than double of what was being paid in China or Japan, adding that Australian producers could buy gas overseas (at much lower world prices) to free up domestic gas to sell at the same profit margin.


Transport subsidies


Petrol

In the transport sector,
fuel subsidies Energy subsidies are measures that keep prices for customers below market levels, or for suppliers above market levels, or reduce costs for customers and suppliers. Energy subsidies may be direct cash transfers to suppliers, customers, or rel ...
reduce petrol prices by $0.38/L. This is very significant, given current petrol prices in Australia of around $1.30/L. The acceptable petrol prices hence result in Australia's petroleum consumption at 28.9 GL every year. According to Greenpeace, removal of this subsidy would make petrol prices rise to around $1.70/L and thus could make certain
alternative fuel Alternative fuel, known as non-conventional and advanced fuels, are any materials or substances that can be used as fuels, other than conventional fuels like; '' fossil fuels'' (petroleum (oil), coal, and natural gas), as well as nuclear mat ...
s competitive with petroleum on cost. The 32% price increase associated with subsidy removal would be expected to correspond to an 18% reduction in petrol demand and a Greenhouse Gases emission reduction of 12.5 Mt CO2-e. The Petroleum Resource Rent Tax keeps oil prices low and encourages investment in the 'finite' supplies of oil, at the same time considering alternatives.


Diesel

The subsidies for the Oil-Diesel fuel rebate program are worth about $2 billion, which are much more than the grants devoted to renewable energy. Whilst renewable energy is out of scope at this stage, an alternative diesel–renewable hybrid system is highly recommended. If the subsidies for diesel were bounded with the renewable subsidies, remote communities could adapt hybrid electric generation systems. The Energy Grants Credit Scheme (EGCS), an off-road component is a rebate program for diesel and diesel-like fuels.


Federal Government

Australia introduced a national
energy rating label In Australia and New Zealand, an energy rating label or energy rating is a label affixed to various appliances prior to retail sale, which allows consumers to compare the energy efficiency of product and allows consumers to know how much power ...
in 1992. The system allows consumers to compare the energy efficiency between similar appliances.


Institutions

The responsible governmental agencies for energy policy are the
Council of Australian Governments The Council of Australian Governments (COAG) was the primary intergovernmental forum in Australia from 1992 to 2020. Comprising the federal government, the governments of the six states and two mainland territories and the Australian Local Go ...
(COAG), the Ministerial Council on Energy (MCE), the Ministerial Council on Mineral and Petroleum Resources (MCMPR), the Commonwealth Department of Resources; Energy and Tourism (DRET), the Department of Environment and Heritage (DEH), the Australian Greenhouse Office (AGO), the Department of Transport and Regional Services, the Australian Competition and Consumer Commission (ACCC), the
Australian Energy Market Commission The Australian Energy Market Commission (AEMC) was set up by the Council of Australian Governments through the Ministerial Council on Energy in 2005. The AEMC was established by the ''Australian Energy Market Commission Establishment Act 2004'' ...
, the
Australian Energy Regulator The Australian Energy Regulator (AER) is the regulator of the wholesale electricity and gas markets in Australia. It is part of the Australian Competition & Consumer Commission and enforces the rules established by the Australian Energy Market C ...
and the Australian Energy Market Operator.


Energy strategy

In the 2004
White Paper A white paper is a report or guide that informs readers concisely about a complex issue and presents the issuing body's philosophy on the matter. It is meant to help readers understand an issue, solve a problem, or make a decision. A white paper ...
''Securing Australia's Energy Future'', several initiatives were announced to achieve the Australian Government's energy objectives. These include: * a complete overhaul of the fuel excise system to remove A$1.5 billion in excise liability from businesses and households in the period to 2012–13 * the establishment of a A$500 million fund to leverage more than A$1 billion in private investment to develop and demonstrate low-emission technologies * a strong emphasis on the urgency and importance of continued energy market reform * the provision of A$75 million for Solar Cities trials in urban areas to demonstrate a new energy scenario, bringing together the benefits of
solar energy Solar energy is radiant light and heat from the Sun that is harnessed using a range of technologies such as solar power to generate electricity, solar thermal energy (including solar water heating), and solar architecture. It is an essenti ...
, energy efficiency and vibrant
energy market Energy markets are national and international regulated markets that deal specifically with the trade and supply of energy. Energy market may refer to an electricity market, but can also refer to other sources of energy. Typically energy developm ...
s * the provision of A$134 million to remove impediments to the commercial development of renewable technologies * incentives for
petroleum exploration Hydrocarbon exploration (or oil and gas exploration) is the search by petroleum geologists and geophysicists for deposits of hydrocarbons, particularly petroleum and natural gas, in the Earth#Crust, Earth using petroleum geology. Exploration m ...
in frontier offshore areas as announced in the 2004–05 budget * New requirements for a business to manage their emissions wisely * a requirement that larger energy users undertake, and report publicly on, regular assessments to identify energy efficiency opportunities. Criticisms # On a net basis this is a tax on the top 40% of income earners which will then be used largely to subsidise the coal industry in attempts to develop
carbon capture and storage in Australia Carbon capture and storage (CCS) is a technology that can capture carbon dioxide emissions produced from fossil fuels in electricity, industrial processes which prevents from entering the atmosphere. Carbon capture and storage is also used to sequ ...
, clean coal. # Deforestation is not included in the scheme where there will be reforestation despite the significant timing differences, the uncertainty of reforestation and the effect of leaving old-growth forests vulnerable. # It is unclear what level of a carbon price will be sufficient to reduce demand for coal-fired power and increase demand for low emissions electricity like
wind Wind is the natural movement of air or other gases relative to a planet's surface. Winds occur on a range of scales, from thunderstorm flows lasting tens of minutes, to local breezes generated by heating of land surfaces and lasting a few hou ...
or solar. # No commitment to maintain Mandatory Renewable Energy Target. # The scheme fails to address climate change caused by burning of coal exported from Australia.


Energy market reform

On 11 December 2003, the Ministerial Council on Energy released a document entitled "Reform of Energy Markets". The overall purpose of this initiative was the creation of national electricity and natural gas markets rather than the state-based provision of both. As a result, two federal-level institutions, the
Australian Energy Market Commission The Australian Energy Market Commission (AEMC) was set up by the Council of Australian Governments through the Ministerial Council on Energy in 2005. The AEMC was established by the ''Australian Energy Market Commission Establishment Act 2004'' ...
(AEMC) and the
Australian Energy Regulator The Australian Energy Regulator (AER) is the regulator of the wholesale electricity and gas markets in Australia. It is part of the Australian Competition & Consumer Commission and enforces the rules established by the Australian Energy Market C ...
(AER), were created.


State policies


Queensland

Queensland's energy policy is based on the year 2000 document calle
Queensland Energy Policy: A Cleaner Energy Strategy
The
Queensland Government The Queensland Government is the democratic administrative authority of the Australian state of Queensland. The Government of Queensland, a parliamentary constitutional monarchy was formed in 1859 as prescribed in its Constitution, as amended fr ...
assists
energy development Energy development is the field of activities focused on obtaining sources of energy from natural resources. These activities include production of renewable, nuclear, and fossil fuel derived sources of energy, and for the recovery and reuse ...
through the Queensland Department of Energy and is most noted for its contribution to
coal mining in Australia Coal is mined in every state of Australia. The largest black coal resources occur in Queensland and New South Wales. About 70% of coal mined in Australia is exported, mostly to eastern Asia, and of the balance most is used in electricity gener ...
. Queensland was referred to by the Morison Government in 2019 as having "a specific problem," and provided a $10 million subsidy to assess the feasibility of a range of power minimisation projects.


South Australia

The South Australian Government has developed an energy policy based on sustainability objectives as well as on South Australia's Strategic Plan. A major priority of South Australia's Strategic Plan is to reduce greenhouse gas emissions in South Australia to achieve the Kyoto target as a first step towards reducing emissions by 60% (to 40% of 1990 levels) by 2050. Measures announced in South Australia include: # stabilisation of greenhouse pollution by 2020 # legislated cuts of 60% in greenhouse pollution by 2050 # legislated renewable energy target of 15% by 2014 In 2009 Premier Mike Rann announced plans to increase the State's renewable energy production target to 33% by 2020. (Letter from Energy Minister Michael O'Brien 29 April 2011) # solar
feed-in tariff A feed-in tariff (FIT, FiT, standard offer contract,Couture, T., Cory, K., Kreycik, C., Williams, E., (2010)Policymaker's Guide to Feed-in Tariff Policy Design National Renewable Energy Laboratory, U.S. Dept. of Energy advanced renewable tariff, ...
# ban on electric hot water systems.


Victoria

In 2006 Victoria became the first state to have a renewable energy target of 10% by 2016. In 2010 the target was increased to 25% by 2020.(21 July 2010)
Victoria targets solar energy as a new report shows renewable energy potential
/ref>


New South Wales

New South Wales has a renewable energy target of 20% by 2020.(23 November 2008)

. ''The Age''. Fairfax Media.
New South Wales had the world's most generous feed in tariff for solar power from 2010 – 2011 at A$0.60/kwh. This 60c/kWh feed-in tariff was revoked for new customers from 27 October 2010. Those in the scheme received that feed-in tariff until 31 December 2016. New customers enter under a net feed-in tariff, in which the power is used by the consumer (and is, therefore, worth to them whatever they would have paid for that power). Excess power is exported at a lower rate (from 0c to 17c per kWh depending on supplier and state). In 2019 Scott Morrison's federal budget allocated $1.4 billion in equity to the Snowy Hydro Project as well as a complementary $56 million towards the building of the Marinus Link. In addition, The Australian Labour Party set a target to obtain 50% of its power from
renewable A renewable resource, also known as a flow resource, is a natural resource which will replenish to replace the portion depleted by usage and consumption, either through natural reproduction or other recurring processes in a finite amount of ti ...
energy sources by 2030.


Western Australia

In some remote areas of WA, the use of fossil fuels is expensive thus making renewable energy supplies commercially competitive. Western Australia offers renewable energy subsidies including; solar heaters, Photovoltaic rebate program for installations at households, schools, factories and renewable Remote Power Generation Program of >$500,000 rebates for large off-grid systems.


Australian Capital Territory

The ACT Government's an integrated policy framework for managing the social, economic and environmental challenges faced by the Territory about energy production and use, was released on 28 September 2011. The policy is a continued commitment to maintaining affordable and reliable electricity and gas supply to Canberra. The policy also establishes the key objective of achieving a more sustainable energy supply as the Territory moves to
carbon neutrality Carbon neutrality is a state of net-zero carbon dioxide emissions. This can be achieved by balancing emissions of carbon dioxide with its removal (often through carbon offsetting) or by eliminating emissions from society (the transition to the "p ...
by 2060.


Tasmania

Tasmania’s electricity grid is largely powered by hydroelectric generation. While this does not directly result in greenhouse gas emissions, the environmental effects of dams proposed or built for hydroelectric generation, such as the proposed but never constructed
Franklin Dam The Franklin Dam or Gordon-below-Franklin Dam project was a proposed dam on the Gordon River in Tasmania, Australia, that was never constructed. The movement that eventually led to the project's cancellation became one of the most significant e ...
, have been hugely controversial. Tasmania’s isolated grid was connected to the mainland via the
Basslink The Basslink () electricity interconnector is a high-voltage direct current (HVDC) cable linking the electricity grids of the states of Victoria and Tasmania in Australia, crossing Bass Strait, connecting the Loy Yang Power Station, Victoria on ...
undersea electricity transmission cable in 2005. Tasmania is also connected to the eastern Australian gas network via the Tasmanian Gas Pipeline, commissioned in 2005. Wood heating is also heavily used in Tasmania.


Other states

Tasmania ) , nickname = , image_map = Tasmania in Australia.svg , map_caption = Location of Tasmania in AustraliaCoordinates: , subdivision_type = Country , subdi ...
has a concession rebate and a life support discount. The
Northern Territory The Northern Territory (commonly abbreviated as NT; formally the Northern Territory of Australia) is an states and territories of Australia, Australian territory in the central and central northern regions of Australia. The Northern Territory ...
has similar programs.


Renewable energy targets

In 2001, the federal government introduced a Mandatory Renewable Energy Target (MRET) of 9,500 GWh of new generation, with the scheme running until at least 2020. This represents an increase of new renewable electricity generation of about 4% of Australia's total electricity generation and a doubling of renewable generation from 1997 levels. Australia's renewable energy target does not cover heating or transport energy like Europe's or China's, Australia's target is therefore equivalent to approximately 5% of all energy from renewable sources. The Commonwealth and the states agreed in December 2007, at a
Council of Australian Governments The Council of Australian Governments (COAG) was the primary intergovernmental forum in Australia from 1992 to 2020. Comprising the federal government, the governments of the six states and two mainland territories and the Australian Local Go ...
( COAG) meeting, to work together from 2008, to combine the Commonwealth scheme with the disparate state schemes, into a single national scheme. The initial report on progress and an implementation plan was considered at a March 2008 COAG meeting. In May 2008, the
Productivity Commission The Productivity Commission is the Australian Government's principal review and advisory body on microeconomic policy, regulation and a range of other social and environmental issues. The Productivity Commission was created as an independent ...
, the government's independent research and advisory body on a range of economic, social and environmental issues, claimed the MRET would drive up energy prices and would do nothing to cut greenhouse gas emissions. The Productivity Commission submission to the climate change review, stated that energy generators have warned that big coal-fired power stations are at risk of "crashing out of the system", and leaving huge supply gaps and price spikes if the transition is not carefully managed. This forecast has been described as a joke because up to A$20 billion compensation is proposed to be paid under the
Carbon Pollution Reduction Scheme The Carbon Pollution Reduction Scheme (or CPRS) was a cap-and-trade emissions trading scheme for anthropogenic greenhouse gases proposed by the Rudd government, as part of its climate change policy, which had been due to commence in Australia in ...
. In addition, in Victoria where the highest emitting power stations are located, the state government has emergency powers enabling it to take over and run the generating assets. The final design was presented for consideration at the September 2008 COAG meeting. On 20 August 2009, the Expanded Renewable Energy Target increased the 2020 MRET from 9,500 to 45,000 gigawatt-hours, and continued until 2030. This will ensure that renewable energy reaches a 20% share of the electricity supply in Australia by 2020. After 2020, the proposed Emissions Trading Scheme and improved efficiencies from innovation and manufacturing were expected to allow the MRET to be phased out by 2030. The target was criticised as unambitious and ineffective in reducing Australia's fossil fuel dependency, as it only applied to generated electricity, but not to the 77% of energy production exported, nor to energy sources which are not used for electricity generation, such as the oil used in transportation. Thus 20% renewable energy in electricity generation would represent less than 2% of total energy production in Australia. Computer modelling by the
National Generators Forum National may refer to: Common uses * Nation or country ** Nationality – a ''national'' is a person who is subject to a nation, regardless of whether the person has full rights as a citizen Places in the United States * National, Maryland, c ...
has signalled the price on greenhouse emissions will need to rise from $20 a tonne in 2010 to $150 a tonne by 2050 if the federal government is to deliver its promised cuts. Generators of Australia's electricity warned of blackouts and power price spikes if the federal government moved too aggressively to put a price on
greenhouse emissions Greenhouse gas emissions from human activities strengthen the greenhouse effect, contributing to climate change. Most is carbon dioxide from burning fossil fuels: coal, oil, and natural gas. The largest emitters include coal in China and la ...
.Power producers warn on emission targets
"The Australian" 24 May 2008
South Australia South Australia (commonly abbreviated as SA) is a state in the southern central part of Australia. It covers some of the most arid parts of the country. With a total land area of , it is the fourth-largest of Australia's states and territories ...
achieved its target of 20% of renewable supply by 2014 three years ahead of schedule (i.e. in 2011). In 2008 it set a new target of 33% by 2020. New South Wales and Victoria have renewable energy targets of 20% and 25% respectively by 2020. Tasmania has had
100% renewable energy 100% renewable energy means getting all energy from renewable resources. The endeavor to use 100% renewable energy for electricity, heating, cooling and transport is motivated by climate change, pollution and other environmental issues, ...
for a long time. In 2011 the 'expanded MRET' was split into two schemes: a 41,000 GWh Large-scale Renewable Energy Target (LRET) for utility-scale renewable generators, and an uncapped Small-scale Renewable Energy Scheme for small household and commercial-scale generators. The MRET requires wholesale purchasers of electricity (such as electricity retailers or industrial operations) to purchase
renewable energy certificates Renewable Energy Certificates (RECs), also known as Green tags, Renewable Energy Credits, Renewable Electricity Certificates, or Tradable Renewable Certificates (TRCs), are tradable, non-tangible energy certificates in the United States that repres ...
(RECs), created through the generation of electricity from renewable sources, including wind, hydro,
landfill gas Landfill gas is a mix of different gases created by the action of microorganisms within a landfill as they decompose organic waste, including for example, food waste and paper waste. Landfill gas is approximately forty to sixty percent methane, ...
and geothermal, as well as solar PV and solar thermal. The objective is to provide a stimulus and additional revenue for these technologies. Since 1 January 2011, RECs were split into small-scale technology certificates (STCs) and large-scale generation certificates (LGCs). RECs are still used as a general term covering both STCs and LGCs. In 2014, the Abbott Government initiated the Warburton Review and subsequently held negotiations with the Labor Opposition. In June 2015, the 2020 LRET was reduced to 33,000 GWh. This will result in more than 23.5% of Australia's electricity being derived from renewable sources by 2020. The required gigawatt-hours of renewable source electricity from 2017 to 2019 were also adjusted to reflect the new target.Annual statement—progress towards the 2020 target
/ref>


Greenhouse gas emissions reduction targets

Coal is the most carbon-intensive energy source releasing the highest levels of
carbon dioxide Carbon dioxide (chemical formula ) is a chemical compound made up of molecules that each have one carbon atom covalently double bonded to two oxygen atoms. It is found in the gas state at room temperature. In the air, carbon dioxide is transpar ...
into the atmosphere. * South Australia, legislated cuts of 60% in greenhouse pollution by 2050 and stabilisation by 2020 were announced. * Victoria announced legislated cuts in greenhouse pollution of 60% by 2050 based on 2000 levels. * New South Wales announced legislated cuts in greenhouse pollution of 60% by 2050 and a stabilisation target by 2025.


Low Emissions Technology Demonstration Fund (LETDF)

* $500 million – competitive grants * $1 billion – private sector funds Currently has funded six projects to help reduce GHG emissions, which are summarised below 82% of subsidies are concentrated in the Australian Government's 'Clean Coal Technology', with the remaining 18% of funds allocated to the renewable energy 'Project Solar Systems Australia' $75 million. The LETDF is a new subsidy scheme aimed at fossil fuel energy production started in 2007.


Feed-in tariffs

Between 2008 and 2012 most states and territories in Australia implemented various feed-in tariff arrangements to promote uptake of renewable electricity, primarily in the form of rooftop solar PV systems. As system costs fell uptake accelerated rapidly (in conjunction with the assistance provided through the national-level Small-scale Renewable Energy Scheme (SRES)) and these schemes were progressively wound back.


Public opinion

The Australian results from the 1st Annual World Environment Review, published on 5 June 2007 revealed that:First Annual World Environment Review Poll Reveals Countries Want Governments to Take Strong Action on Climate Change
, '' GMI'', published 2007-06-05, accessed 9 May 2007
*86.4% are concerned about climate change. *88.5% think their Government should do more to tackle global warming. *79.9% think that Australia is too dependent on fossil fuels. *80.2% think that Australia is too reliant on foreign oil. *89.2% think that a minimum of 25% of electricity should be generated from renewable energy sources. *25.3% think that the Government should do more to expand nuclear power. *61.3% are concerned about nuclear power. *80.3% are concerned about
carbon dioxide emissions Greenhouse gas emissions from human activities strengthen the greenhouse effect, contributing to climate change. Most is carbon dioxide from burning fossil fuels: coal, oil, and natural gas. The largest emitters include coal in China and lar ...
from
developing countries A developing country is a sovereign state with a lesser developed industrial base and a lower Human Development Index (HDI) relative to other countries. However, this definition is not universally agreed upon. There is also no clear agreem ...
. *68.6% think it appropriate for developed countries to demand restrictions on carbon dioxide emissions from developing countries.


See also

* Asia-Pacific Emissions Trading Forum *
Australian Renewable Energy Agency The Australian Renewable Energy Agency (ARENA) is an independent agency of the Australian federal government, established in 2012 to manage Australia's renewable energy programs, with the objective of increasing supply and competitiveness of A ...
*
Carbon capture and storage in Australia Carbon capture and storage (CCS) is a technology that can capture carbon dioxide emissions produced from fossil fuels in electricity, industrial processes which prevents from entering the atmosphere. Carbon capture and storage is also used to sequ ...
* Effects of global warming on Australia *
Energy diplomacy Energy diplomacy is a form of diplomacy, and a subfield of international relations. It is closely related to its principal, foreign policy, and to overall national security, specifically energy security. Energy diplomacy began in the first half of t ...
*
Energy policy Energy policy is the manner in which a given entity (often governmental) has decided to address issues of energy development including energy conversion, distribution and use as well as reduction of greenhouse gas emissions in order to contri ...
* Energy in Victoria


References


Further reading

*Australian Government (2007)
''Australian Government Renewable Energy Policies and Programs''
2 pages. *New South Wales Government (2006)
''NSW Renewable Energy Target: Explanatory Paper''
17 pages. * The Natural Edge Project, Griffith University, ANU, CSIRO and NFEE (2008)
''Energy Transformed: Sustainable Energy Solutions for Climate Change Mitigation''
600+ pages. *
Greenpeace Australia Pacific Greenpeace Australia Pacific (GPAP) is the regional office of the global environmental organisation Greenpeace. Greenpeace Australia Pacific is one of Australia, Australia's largest Environmentalism, environmental organisations. Origins and fo ...
Energy volution Scenario: Australia, 200

47 pages. * Beyond Zero Emissions Zero Carbon Australia 2020, 201

{{Authority control Energy policy of Australia, Public policy in Australia