Draft Energy White Paper 2011


The Minister for Resources and Energy, Martin Ferguson AM MP today launched the draft Energy White Paper for public consultation, alongside the release of the 2011 National Energy Security Assessment and the Strategic Framework for Alternative Transport Fuels.
According to the Minister, the draft White Paper sets out “a long term strategic framework intended to give investors, consumers and planners a clear sense of direction and confidence in our energy future” in an affordable, reliable and sustainable way.
The need for a new Energy White Paper
It has been seven years since the release of the last Energy White Paper. Since then, there has been unprecedented change in the Australian energy sector, including; the rise in Australia’s energy exports from $24 billion  to around $69 billion per annum; trebling of global oil prices; an unprecedented scale of investment in the Australian export energy sector; growth in the LNG sector; Australia’s role as the world’s largest coal exporter and a top three uranium producer; and finally, the passing of the Government’s carbon price legislation in November which will drive investment in lower emissions technologies in the years ahead.
The draft White Paper sets out the challenges facing Australia’s energy sector in the near future. It then identifies priority areas in order to overcome those challenges.
There is now an unprecedented need for large scale investment in our energy sector.  As such, it will be necessary to;
  • Facilitate investment in the order of $240 billion in Australia’s electricity and gas generation, transmission and distribution sectors between now and 2030.
  • Facilitate further investment in our liquid fuels infrastructure.
  • Ensure the production of sound regulatory frameworks to attract capital to deliver this investment.

Energy prices have risen and will continue to rise. As such, it will be necessary to;

  • Enhance consumer engagement and the level of consumer understanding of energy use as the first step in behavioural response to alter energy use patterns
  • Deliver energy competitively
Collaboration with global partners is required to accelerate the development and commercialisation of clean energy technologies.
  • This will, in turn, facilitate a transformation of the Australian energy sector and allow us to meet targets for cuts to greenhouse gas emissions
The ongoing support of the broader community is crucial to the effectiveness of this new strategic framework.
  • As such, development must progress in a manner that meets best practice with regards to environmental standards and landowner engagement.
Priority Areas
The draft Energy White Paper identifies four priority areas for further action in response to the above challenges:
  • Strengthening the resilience of Australia’s energy-policy framework;
  • Re-invigorating the energy market reform agenda;
  • Developing Australia’s critical energy resources – particularly gas; and
  • Accelerating clean energy outcomes.
Strengthening the resilience of Australia’s energy-policy framework
  • The Government proposes that a strategic review of national energy policy be undertaken every four years, supported by a review of national energy security every two years.
  • The Government also commits to improving Australia’s energy information base, including through:
    • Biennial publication from 2014 of the Australian Energy Resource Assessment and the Australian Energy Technology Assessment (AETA), and expanding the scope of the AETA to specifically cover liquid fuel technologies;
    • Enhancing the quality and timeliness of public information on Australia’s conventional and unconventional gas reserves and projected market developments, which will help inform policy development;
    • Annual publication of the Australian Energy Market Commission’s report on trends in future electricity prices.
Re-invigorating the energy market reform agenda
The Government commits to reinvigorating the energy market reform agenda by:
  • Privatising government-owned energy assets;
  •  Fully deregulating retail energy prices where effective competition exists;
  •  Implementing an improved energy productivity (demand side) framework;
  • Completing the transition to truly national energy markets;
  •  Further gas market monitoring to better inform government decision-making, and continued consideration of policy settings to ensure that objectives are being delivered, given the growing importance of gas in our energy future;
  • Reviewing the current set of non-complementary policy interventions from all levels of government that were made in the absence of a carbon price, and further agreeing not to introduce new measures that are non-complementary.
Developing Australia’s critical energy resources – particularly gas
The Government will seek to encourage investment in energy resource development, by:
  •  Reviewing  the efficiency and effectiveness of Australia’s offshore exploration policy and consider alternative acreage release models (such as cash bidding);
  • Continuing implementation of current offshore regulatory reforms and enhance prevention and response capabilities;
  • Closely monitoring development of Australia’s gas resources and market dynamics to ensure that both export and domestic supply needs are being adequately addressed;
  •  Ensuring that offshore gas project design and development are providing the best returns possible for the Australian community;
  •  Updating offshore retention lease arrangements to: improve transparency; allow third-party comment on the commerciality of developing particular fields; ensure that reserves are not ‘warehoused’ indefinitely; and provide certainty of gas supply over long timeframes including for highly capital-intensive LNG projects;
  • Continuing to advance national consistency and transparency in regard to multiple land use resources projects through the development of a national multiple land use framework under the COAG Standing Council on Energy and Resources;
  •  Working with states and territories, industry and other stakeholders to ensure the safe and sustainable development of Australia’s coal seam gas resources;
  • Providing regular forecasts for export infrastructure requirements for bulk commodities.
Accelerating clean energy outcomes
The Government will work to accelerate clean energy outcomes by:
  • Expediting the implementation of its clean energy programs, including establishing the Australian Renewable Energy Agency by July 2012 and the Clean Energy Finance Corporation from 2013–14 and continuing to progress carbon capture and storage initiatives;
  • Working with other jurisdictions to harmonise state and territory–based micro-distributed generation feed-in-tariff schemes with the agreed COAG principles for complementarity of climate change mitigation measures;
  •  Improving  the quality of Australia’s clean energy information base;
  •  Continuing to seek opportunities to develop collaborations with business and the research community;
  • Continuing to engage in international processes and partnerships to promote clean energy technology development and deployment;
  •  Working with state and territory governments to identify the need for nationally consistent and supportive regulatory arrangements for new clean energy technologies.
Engagement and Consultation Process 
The draft Energy White Paper has been developed as a basis for stakeholder consultation. Written public submissions are invited from interested parties by no later than 16 March 2012. This process will be supported by a series of open information sessions to be held in state and territory capital cities.
Further details on the submission and consultation processes are available at www.energywhitepaper.ret.gov.au
The draft Energy White Paper is available here. The Minister’s speech is available here.
For more information, contact your Hawker Britton consultant.