Australia’s energy sector, which underpins our modern economy and high national standard of living, has entered a period of unprecedented transformation and expansion.
These changes are part of the broader restructuring of the Australian economy as we move further into the Asian century and transition to a clean energy economy. They bring opportunities for new business and wealth creation, as well as challenges and risks.
In managing this transformation, national energy policy must aim to provide secure, reliable, clean and competitively priced energy to consumers while building national wealth through the safe and sustainable exploitation of our energy resources.
Australia has a generally positive energy security outlook. This will increasingly be shaped by the strength of future investment, the cost of energy and our ongoing response to climate change. Australia’s abundant reserves of energy resources underpin our energy security, but maintaining a high level of security also depends on our integration into diversified supply chains, access to well-functioning global energy markets and continued effective responses to market and non-market risks.
Rising costs of production, the need to replace ageing infrastructure and the development of clean sources of energy mean that Australia will face continued pressure on energy prices. We must position ourselves well to retain our hard-won competitive advantage in reliable and competitively priced energy.
Australian governments must collectively undertake further market, regulatory and institutional reforms to ensure the efficient supply of energy and responsiveness of demand. Greater competition will stimulate business innovation to offer consumers better services, including a suite of information and ‘smart’ tools to help them control their energy use and keep costs down.
We must also further develop our gas markets and improve our ability to secure the next wave of investment in our energy resources. This is particularly important in promoting economic and social development in many of our regional communities, where energy-related developments play a significant role in generating jobs, building infrastructure and providing income.
The sustainable development and use of energy, particularly to improve our productivity and reduce our greenhouse gas emissions, is paramount in our long-term economic and environmental future.
Australia’s journey towards a lower-emissions economy has begun with the introduction of the carbon price and other supporting measures under the Australian Government’s Clean Energy Future Plan. We must now let our energy and carbon markets operate as intended to determine the nation’s future energy mix and provide for a reliable, clean and competitively priced supply of energy.
The way we generate and use energy and the volume and diversity of our energy exports are changing. We must ensure that sound energy policy prevails to manage this transition while realising opportunities to underpin Australia’s prosperity for decades to come.