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Australia’s Energy Productivity Plan

By Nicky Callinan on April 24th, 2015

The Federal Government has released its long-anticipated Energy Productivity Plan White Paper earlier this month, outlining the Government’s policy on strategic issues facing the energy sector in Australia.

The White Paper focuses on three main elements to deliver reliable and cost competitive energy to households and business:

  • Increased competition: increased competition to keep energy prices down, with an end to electricity subsidies and more privatisation of poles and wires; and the lifting of state policies that impede unconventional gas production;
  • Energy productivity: an increase of up to 40% in energy productivity (the ratio of economic output to energy consumption) by 2030;
  • Investment: a “technology neutral” approach to developing future energy sources for electricity and transport.

The government uses a broader definition of energy productivity that goes beyond energy efficiency, as a way of doing more with less. In practice, it means Australia could be using less energy – which is good news for energy security, and for reducing greenhouse gas emissions from burning fossil fuels.

One significant new proposal is a National Energy Productivity Plan to “lower costs, improve energy use and stimulate economic growth”. This will cover the built environment, equipment and appliances, and vehicles, and aims to “improve national energy productivity by up to 40% by 2030”.

While the White Paper does not detail the exact mechanics of promised policy changes, it does indicate to energy market stakeholders the basis for the Government’s energy priorities and provides guidance as to the Government’s approach to energy market reform, national energy productivity and investment in the energy sector. Some of the reform activities outlined in the paper will, if implemented, give rise to significant changes in the Australian energy market. In particular, the COAG reform activities selected as a high priority by Government will provide a strong focus for change in the short to medium term.

However many critics suggest the target set out in the white paper is not ambitious enough, as “business as usual” would deliver a 25% improvement by 2030, so the 40% target can be feasibly near doubled.

View the Energy White Paper