The Albanese Government has moved quickly on energy and emissions in its early months in power.
Most media focus has been on the legislated emissions reductions target of 43 per cent by 2030 and net zero by 2050. However two other decisions are likely to have at least as strong an impact on our industry.
The first was the expansion of the mandate of the Australian Renewable Energy Agency (ARENA) to include energy efficiency and electrification for the first time. The second was last Friday’s decision by federal and state energy ministers to put an emissions objective into the National Energy Objectives and commit to a new national Energy Transformation Partnership – the first full integrated national energy and emissions agreement.
The two decisions together mean that Australia’s energy markets now have the goal of net zero hardwired into them.
This will require massive investment to achieve and comes as energy markets are transforming at pace. That means transformation towards zero emissions energy generation and a radical shift to a decentralised grid.
But it will also require a huge growth in the size of the grid as old coal-fired power stations are replaced with renewables and the economy fuel switches from gas to electricity over time.
Former Chief Scientist Alan Finkel estimates the capacity of the electricity grid will need to triple to accommodate this.
So what has all this got to do with property? If the energy transition requires this level of growth, then it makes sense to encourage as much energy efficiency and demand management from users as possible. This could make a real difference to the costs inherent in this massive expansion of grid capacity.
Buildings are the batteries capable of delivering enormous load flexibility to our energy system at little to no cost, through efficiency measures, shifting peak heating and cooling loads and soaking up excess supply when renewables are plentiful to store energy and provide EV charging.
With the new energy policies now in place, this sets a platform for the property industry and other sectors to be encouraged to accelerate their powerful progress on energy efficiency.
This is a platform the Property Council and our allies will be pursuing strongly in coming months and years.
