2020 – 21 Federal Budget: The Future of Australian Energy

With the release of the latest federal budget, our environmental consultants thought they’d take the time to break down some of the key takeaways regarding the environmental and energy portions.

Key allocations

  • $52 million gas industry expansion.
  • $50 million towards carbon capture and storage.
  • $70.4 million for a regional hydrogen export hub to be allocated over five years.
  • $5 million for electric vehicles.
  • $1.62 billion towards ARENA (Australian Renewable Energy Agency) years for another 12.

Concentrating on technology

The Morrison government’s technology roadmap (which was announced earlier in the year) looks to put its faith in potential new energy sources by hedging its bets on several potential avenues, rather than staking it all on a single concept. Whilst the roadmap has drawn criticism from the opposition, Greens and even some Liberal members, the former ARENA chairman, Martijn Wilder has praised the roadmap for identifying “a number of critical areas that are required to drive the economy toward net-zero [emissions]”.

With that being said, Prime Minister Scott Morrison himself has refused to sign up to a 2050 net-zero target – claiming he’s “more interested in the doing”. Some of the energy avenues being pursued on this roadmap include hydrogen and carbon capture and storage.

What is carbon capture and storage?

Essentially, carbon capture and storage (sometimes abbreviated to CCS) is where most (not all) of the carbon dioxide is captured from industrial processes (such as burning fossil fuels) and transported to an underground storage area where it can be safely housed – preventing it from polluting the air.

Australia is already home to the largest carbon capture and storage project in the world – Chevron’s Gorgon gas facility. However, the technology faced difficulties and wasn’t functional at launch. It took Chevron two years to find a solution. The gas plant was still operational for those two years and dumped millions of tonnes of greenhouse gasses into the atmosphere.

Whilst this initiative works to reduce greenhouse emissions released into the atmosphere, it is by no means a replacement for clean, renewable energy sources, acting more like a partial band-aid on a perpetual issue instead.

There’s also the matter of the extra machinery and transport needed to execute carbon capture and storage which in itself exudes more pollution into the air. This method has been criticised for yielding little results when compared to the funding it receives as well as supporting the fossil fuel industry.

Power plant revitalisation

Further adding to the energy budget’s criticisms, the 1320 megawatt Vales Point power station in NSW will be receiving funding to cover repair and upgrade costs. Whilst the exact amount is yet to be decided on, the upgrades boast “brand new turbines and high-pressure heaters” within the next few years – despite it being slated to close in 2029.

Additionally, to close up the gap left by the planned closure of the Liddell power plant in 2023, the Coalition has stated they will build a gas-fired power plant by 2023 if private power companies fail to commit by April 2021 to bridge the gap themselves. Gas-fired plants utilise natural gas to produce electricity. They emit half the amount of CO2 that coal does when burnt, however, are still not considered a clean, renewable energy source.

Renewable energies snubbed

One of the noticeable omittances from the 2020 – 21 budget, was renewable energies which received a small allocation. A mere $5 million was allocated to electric vehicle development. Motor vehicle pollution makes up 17% of the country’s greenhouse gas emissions (2017 figure).

Clean, renewable energies such as solar or wind power are considered to be the way forward – working to lessen greenhouse gasses and create a brighter future for both power and the environment. The Clean Energy Council stated that this budget was a missed opportunity to “kick-start the economy and create tens of thousands of sustainable jobs in rural Australia”.

The hydrogen hub

The only form of clean energy to effectively come out of this year’s budget was the hydrogen export hub which is planned to be placed in South Australia. The advantage to this is that the hub is said to only produce green hydrogen – which is where clean and renewable electricity is passed through water to create the hydrogen. The process itself does not produce any greenhouse gasses.

That being said – the 2020 First Low Emissions Technology Statement indicates that “clean hydrogen” will be generated using “off-grid gas with CCS, and coal gasification with CCS” as they’re the “lowest cost clean production methods in the short-term”. The document then states that “renewable production methods will come down in cost as clean hydrogen demand grows”.

Are you in need of environmental consultants?

Whilst the budget may not shine the brightest light on an environmentally friendly future –  choosing to invest in new and upcoming technology rather than tried and true renewables – Alpha Environmental is still here for all your environmental needs including ESA’s, asbestos remediation and groundwater testing.

If you’d like to discuss our services further and find out how we can help you or your business, then you can contact us via the enquiry form on our website or by calling 1300 039 181.