Every advanced economy is seeking affordable, reliable and cleaner energy. It’s the right thing to do.
Australia has spent more than a decade grappling to find the right policy settings and has not made much progress. There is now the opportunity for energy and emissions policies to be aligned for a well-managed and fair transition to a lower carbon economy.
ANZ will help finance the transition, but we need the right policies and greater certainty so we can play our part.
Through the Finkel Review and as our governments make subsequent decisions we can have a workable set of policies to deliver a reliable, lower carbon energy supply with price predictability.
We have made our own commitments. ANZ will fund $A10 billion by 2020 to support our customers’ transition to a lower carbon economy including supporting increased energy efficiency, renewable energy and battery storage, low emissions transport and ‘green’ buildings. We are already halfway towards achieving this target.
A national Clean Energy Target with a tough but sensible low emissions benchmark would be part of a balanced policy “suite” for a secure, reliable, affordable and lower-carbon electricity market. All low emissions technologies should be able to compete within this framework.
We know renewables, gas and coal will all be needed in the transition to cleaner energy, but policy uncertainty will hamper our efforts to create a modern energy sector with a balanced mix of generation.
Energy generation assets require significant investment and typically need to operate for a long time before they can recoup their upfront cost and generate a return for investors.
That’s why policy certainty in the energy sector is a crucial ingredient for financiers and investors; it provides us with greater confidence to inject the necessary capital to fund the transition.
It is essential to manage the existing energy infrastructure responsibly as part of the transition. So we welcome the Finkel Review’s recommendation of an orderly closure process for existing coal-fired power stations across the country.
Closures should be announced with at least three years’ notice. This gives investors the time they need to assess the impacts on the broader electricity system and, importantly, assists a ‘just transition’ for affected workers and their communities.
We also support developing a 2050 national emissions reduction strategy in line with Australia’s commitments under the Paris Agreement. It can help provide guidance for the investment we need to achieve a decarbonised electricity system by the second half of the century.
Finally, I can only emphasise the Finkel Review’s finding “managed poorly, our energy future will be less secure, more unreliable and potentially very costly”.
It is in all our interests to move beyond old debates and seek a pragmatic solution to the problem at hand.
Shayne Elliott is CEO at ANZ