Energy Investment: Australia's Energy Challenge
Political uncertainty generated by the carbon tax, the subsequent proposed emissions trading system (ETS) and other emission reduction related policies are the greatest threat to Australia's energy security according to speakers at CEDA's Energy Investment: Australia's Energy Challenge event held in Melbourne on April 29.
Conference delegates heard that while the carbon tax may not be the biggest driver of price rises in energy costs for Australians in the early years, the uncertainty and changes to policies have led to a significant drop in new generation projects, which will be critical if we are to meet future energy demand.
Arguably the greatest short term pressure on electricity prices is due to the need to finance investment in transmission - as IPART has recently confirmed for NSW.
To read more click here.
Energy is a key policy and research topic for CEDA in 2011. CEDA energy forums will be held across Australia over coming months covering a range of topics from the carbon tax to nuclear energy. Post event summaries will be included on the CEDA website from a selection of these events. Click here to see a full list of upcoming events.
In addition to generating debate on this important topic through energy forums, a new CEDA policy study is underway which will draw on expertise from around Australia to look at how we meet long term energy requirements, including the potential for renewable and nuclear energy.
This policy document is due to be completed in early 2012.
Anthea Harris - Acting First Assistant Secretary, Climate Strategy and Markets, Department of Climate Change
Ms Harris provided an overview of the work of the Multi Party Climate Change Committee from their guiding principles - these include energy security, investment certainty and budget neutrality - through to what is still being debated such as if and how international units might be included once the carbon tax moves to a flexible price 'cap and trade' emissions trading system in 3 to 5 years.
CEDA members can access an audio of Anthea Harris' speech by clicking here.
John Howarth - Executive General Manager - Transmission Services, Australian Energy Market Operator (AEMO)
Mr Howarth provided an overview of modeling completed by AEMO on capital costs over 20 years on transmission and generation using a range of scenarios, from a light carbon tax to no carbon tax.
Mr Howarth also highlights that the cost pressure on the retail and commercial energy markets will be far greater from network maintenance and upgrade spending than it will be from a carbon price in the early years. However, while network spending is occurring, AEMO's concern is that new generation spending is not happening through this uncertain transition period and that besides projects that come under Large-scale Renewable Energy Target, no new generation projects have been committed to in the past 12 months in the national energy market.
CEDA members can access John Howarth's presentation or an audio of his speech by clicking here.
Ross Edwards - General Manager Generation Development, TRUenergy
Mr Edwards discussed what is needed for effective climate policy going forward such as funding to address not only future growth requirements but also retirement of some energy sources. He also highlighted the difficulty caused by the uncertainty around Australia's climate policies, from the carbon tax to the Renewable Energy Target.
"The unfortunate reality is that the main constant we've had in the past few years is change and that's not what you need for long term investment."
CEDA members can access Ross Edwards' presentation or an audio of his speech by clicking here.
Click here to listen to the Q&A session with the above three speakers.
Jim Miller - Head of Infrastructure, Utilities and Renewables, Australia and New Zealand, Macquarie Capital Group
Mr Miller provided an overview of the level of capital available for energy sector projects in Australia, highlighting that if a secure framework is in place then there is significant capital available globally to meet demand for energy projects in Australia.
"There is no hesitation about investing in Australia, subject to understanding how the energy market is going to work with the uncertainty over carbon pricing and emissions trading going forward."
Shane Breheny - Chief Executive Officer - CitiPower and Powercor Australia
Mr Breheny highlighted the key regulatory issues facing the sector from the lack of consistency in policy areas such as connection and feed-in tariffs from state to state, to the distortions the different policies cause to the energy market.
CEDA members can access an audio of Shane Breheny's speech by clicking here.
Nino Ficca - Chief Executive Officer and Managing Director, SP AusNet
Mr Ficca spoke about the key challenges facing the industry from the threat to investment in the sector due to over regulation, to the challenge that rapid development of new technology - from renewables to electric cars - places on infrastructure replacement decisions being made now.
CEDA members can access an audio of Nino Ficca's speech by clicking here.
Brett Thomas - Group Managing Director - Asia Pacific, ACCIONA
Mr Thomas highlighted some of the issues facing the wind energy industry in Australia from changes in government and the impact that can have on policy certainty and planning consents to accessing the grid.
CEDA members can access an audio of Brett Thomas' speech by clicking here.
Click here to listen to the Q&A session with the above speakers.
Ian Macfarlane - Shadow Minister for Energy and Resources
Mr Macfarlane spoke about why he thinks the next six months will be some of the most interesting in political history since the dismissal of the Whitlam Government and his concerns about key issues facing the sector from the resources tax and its impact on Australia's sovereign risk profile to the carbon tax.
"We're seeing a time when average Australians or everyday Australians are tuning into energy policy and resources issues like never before."
CEDA members can access an audio of Ian Macfarlane's speech by clicking here.
Paul Simshauser - Chief Economist and Group Head of Corporate Affairs AGL
Mr Simshauser provided financing scenarios for new energy infrastructure, highlighting the challenges facing the sector and financing ramifications of Government policies for energy infrastructure.
CEDA members can access an audio of Paul Simshauser's speech and presentation by clicking here.
Click here to listen to the Q&A session with the above speakers.
Roxanne Punton | Communications Manager
3 May 2011