1.2: Why the time is right for a new Energy White Paper
Much has changed in Australia, in our region and across the globe since 2004, when the last Energy White Paper was published:
- Increased energy demand, particularly for peak electricity, is driving significant new investment in Australia’s energy infrastructure and rising energy prices.
- There is a bipartisan commitment to unconditionally reduce greenhouse gas emissions by 5% below 2000 levels by 2020. The Australian Government’s Clean Energy Future legislation also sets down a long-term target to reduce Australia’s carbon pollution by 80% below 2000 levels by 2050. Carbon pricing was introduced on 1 July 2012 as part of the Clean Energy Future Plan and will ensure that we meet our emissions reduction commitments.
- Australia energy exports have tripled to around $70 billion in 2010–11, driven largely by sustained industrialisation and urbanisation in Asia (BREE 2012a).
- Our energy base is being transformed. Major new gas developments, notably the expansion of east coast coal-seam gas and our LNG industry, and large-scale renewable energy initiatives are underway with significant potential for further expansion.
- Energy policy is increasingly intersecting with many other areas of policy, such as climate change, innovation, industry and social policy, national security, and transport and urban planning.
Over the next decade we will see additional factors in play:
- Carbon pricing will drive transformational investment in clean energy that will continue for many decades.
- We will need major new investment, particularly in clean energy generation and energy infrastructure, over the next two decades. Depending on such factors as future growth in energy demand, this could be as high as $240 billion, with around as much again for the development of our energy resources. Foreign investment and open trade will be critical to our growth and prosperity.
- Australia is likely to experience further structural change in its liquid fuel supply arrangements.
- Long-term energy security to support economic and social development will continue to be a key concern for many countries, driving their energy and technology choices.
While markets are highly flexible and generally efficient at managing risk, uncertainty can impede or increase the cost of investment and, ultimately, costs for consumers. Clear policy frameworks and objectives will provide stability and instil market confidence.