The blurred vision in Australia's energy policy

Australia sorely needs a resilient and affordable energy supply system, but there's precious little guidance to be found from the government.

An Australian energy vision is necessary, but the federal government has so far failed to articulate any hint of the country's role in the global transition to a low-carbon society.
Ahead of the release of the energy White Paper, expected before the end of the year, the government's green paper said there is no ‘silver bullet’ to reform the energy industry and emphasised the need to drive productivity throughout the sector.

This could mean anything, and does not provide helpful guidance to investors.

There are massive global funds available for investment, but investors are risk averse and will not allocate funds to countries that do not offer policy certainty.

The Energy Policy Institute is certain that technology neutrality is central to good energy policy. Technology neutrality requires all energy sources and technology options to be kept open and assessed on their economic, technical, environmental and social merits. Policy settings should encourage competition and foster innovation in each of them.

Technology neutrality should be the paramount and fundamental policy principle with no exceptions: it is imperative for a secure, resilient and affordable energy supply system. This will lead to the deployment of diverse energy options at an appropriate scale to achieve affordable outcomes.

But Australia seems to be plagued by contention amongst rival energy technology proponents and opponents, as well as investor groups and universities.

This undermines investor confidence across much of the energy industry, threatening Australia's export earnings and putting domestic energy supply at risk.

Project planning approval processes have become unpredictable. In the case of coal seam gas, some companies have written down asset values because of regulatory uncertainties.
A policy based on technology neutrality is critical to the resolution of these arguments.
Australia has a need for a clear statement of long-term intent and a need to work towards a significant reduction in emissions from energy systems over time. This needs to be pursued in a manner which protects domestic competitiveness and energy security, guarding the economy against getting ahead of global efforts.

The Institute believes that all stakeholders, including major industrial consumers and the community, should participate in the formulation of a long-term energy vision. There is a need to recognise the anxiety within industry and the broader community over Australia’s international competitiveness as well as the build-up of greenhouse gas emissions.

What is needed is a policy based on practical common sense, that is technology neutral and recognises community anxieties about the increasing stock of greenhouse gases in the global atmosphere.

But the transition to a low-carbon society will take time, and it will need to look beyond the lifetime of our current energy assets.

Robert Pritchard is the executive director of the Energy Policy Institute of Australia

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