2023 Australian Energy Ministers’ meeting: key outcomes

On the 24th of February 2023, Australia’s Energy Ministers met to discuss national energy, climate change and adaptation policies.

We’ve summarised the outcome of the meeting and some of the key actions that are set to occur as a result of the priorities identified in the meeting.

The energy ministers agreed on five strategic priorities to focus on over the next 12 months:

1. Transforming Australia’s energy system to align with net zero while providing more affordable, secure and reliable energy to Australians. This includes improving regulatory certainty and efficiency for – and accelerating delivery of – dispatchable renewable energy, storage and nationally significant transmission projects;
2. Efficiently and effectively contributing to the achievement of all Australian emissions reduction targets;
3. Investing in Australia’s adaptation and resilience to climate change;
4. Empowering and comprehensively engaging with Australia’s regions and remote communities, including First Nations peoples, on the pathway to decarbonisation, and Australia becoming a renewable energy superpower;
5. Delivering a coordinated and strategic approach to achieving improvements in energy productivity across the economy.

To this end, the energy ministers committed to finalising a bill in mid-2023 to incorporate an emissions reduction objective in the National Energy Objectives. Once passed, the bill will require Australia’s energy market bodies, the Australian Energy Market Operator, the Australian Energy Regulator and the Australian Energy Market Commission to consider Australian climate change policies when making decisions.

The ministers also agreed to expedite a package of measures expanding the Australian Energy Regulator’s gas and electricity market monitoring powers, with a view to passing this legislation as soon as feasible.

The meeting also resulted in a way forward when it came to transmission access reform. Under the new plan, senior officials will work alongside the Energy Security Board to develop the Congestion Relief Market (CRM). The CRM is a voluntary market that will allow generators, load and storage to trade congestion relief. This could mean, for example, that a battery storage facility may agree to start charging in exchange for a payment from another generator who wants to dispatch more electricity into the grid. The reform will also implement a so-called priority access model which means that generators that connected to the grid first will be the last to be constrained off when there is too much generation in a part of the grid.

On a different topic, it was decided the Commonwealth will lead jurisdictions in a review of the National Hydrogen Strategy to ensure the national strategy positions Australia on a path to be a global hydrogen leader by 2030, on both an export basis and for decarbonisation of Australian industries.

In regard to the National Electric Vehicle strategy, the energy ministers agreed on the following commitments to collaborate on:

• National standards;
• Data sharing;
• Electric Vehicle (EV) affordability;
• Remote and regional EV charging infrastructure;
• Fleet procurement; and
• Education and awareness on the benefits and realities of driving an EV in Australia.

It was also decided that the New South Wales government will continue to work with energy market bodies on an orderly exit mechanism for use in their jurisdiction. The orderly exit mechanism is designed to ensure coal and gas-fired generators close in a predictable manner that avoids energy shortages.

In a different vein, the energy ministers have agreed to support the scoping of Australia’s first National Climate Risk Assessment (NCRA) to deliver a shared national framework to inform Australia’s national priorities for climate adaptation and resilience actions and enable consistent monitoring of climate risk across all Australian jurisdictions.

Another outcome of the meeting is the establishment of two working groups designed to tackle different energy issues, including:

• A decarbonisation working group to ensure there are clear and consistent principles for reporting on how Australia is progressing towards its net-zero targets
• A cross-jurisdictional working group, including local government, focused on the development of Australia’s offshore wind industry, with the Commonwealth set to lead progression of priority offshore zones in a timely manner.

The energy ministers will also continue to engage on a program of work on consumer energy reforms aimed at improving market efficiency, competition and consumer benefits.

Finally, an update from the Commonwealth was provided regarding the development of the National Energy Performance Strategy, a forward plan for demand-side action which looks to improve energy performance across the economy and reduce emissions.

To read more about the outcomes of future energy ministers’ meetings, visit the Energy and Climate Change Ministerial Council website here.