Hamilton Locke’s New Energy team attended The Australian Clean Energy Summit 2023 and the neighbouring Energy Next conference. The team’s key takeaways and a list of panellists are set out below:
Address from The Hon. Chris Bowen, Minister for Climate Change & Energy
Kicking off the Clean Energy Summit, Minister Bowen announced the creation of six sector-by-sector decarbonisation plans that would replace the existing Net Zero 2050 plan (which he decried as ‘a fantasy’). In a subsequent Q&A with Anna Freeman (Clean Energy Council), Bowen clarified that no sector-specific targets would be set; rather, the policy would serve to align Australia with other renewable leaders (like Germany) and to notify investors as to the government’s proposed pathway up to 2050. Separately, Minister Bowen refused to comment on any extension to the Renewable Energy Target.
Realising Australia’s potential as a renewable energy superpower
In the keynote presentation, Daniel Westerman (AEMO) emphasised that the energy transition will be built on low-cost generation, firming capacity and transmission that is fit for purpose and ensuring the lowest cost to replace the coal fired fleet. AEMO’s integrated system plan (ISP) is clear that investment is needed at scale. The east coast of Australia needs to triple renewable generation by 2030 and then again by 2050. Energy storage needs to be scaled by a factor of 50. There is an urgent need for investment, and building trust with community is crucial to getting projects off the ground.
Rana Adib (REN21) highlighted that the Inflation Reduction Act of 2022 (IRA) and REPowerEU has caused tension in global markets. There is still a lot of confusion and misinformation amongst communities regarding the impact of renewable energy projects in their area.
Guy Debelle (Fortescue Future Industries) addressed that policy is one inhibitor and supply chain is another (including the expertise required across all tiers of industry) in the energy transition. There is a clear increase in demand, but supply response is slow. This results in an increase of the wholesale electricity price. Banks need certainty on input costs, and capital is now flowing towards strong sponsors who can warehouse this risk across their portfolio of generation assets.
Clean Finance: Unlocking the capital to power Australia’s renewable energy future
The Clean Finance Panel (see panellists in table below) highlighted the importance of a clear and orderly plan to achieve net-zero emissions, with national targets playing a crucial role in facilitating an organised transition. The panel highlighted the significance of detailed sector policies and plans to effectively allocate capital, based on considerations of diversification, risk, liquidity and return. Collaboration with institutional investors was emphasised as essential when designing government policies to attract capital. Other crucial factors identified by the panel to unlock capital included addressing social license, workforce issues and supply chain challenges.
Market Signals: Energy and carbon markets shaping Australia’s economic transformation
The Carbon Market Panel focussed on the architecture of Australian carbon markets and explored the possibilities of utilising existing market frameworks to create and deliver more value to investors, clean energy project developers and society. It is important to correctly identify and value trading units in carbon markets to improve their fungibility across industries and markets. The twofold combination – expanding market framework and improved fungibility of trading units – were identified as crucial components in incentivising the rapid adoption of renewable energy by large players in the economy of Australia.
Powering On: integrating distributed energy into Australia’s networks & markets
The Distributed Energy Panel discussed the immense contribution made by consumer-driven distributed energy resources (such as rooftop solar) in driving Australia towards clean, renewable energy and its Net Zero targets. The urgent requirement for policies to fully integrate distributed energy resources to create a dynamic energy market was highlighted throughout the discussion. The discussions also focussed on the need to prioritise the interoperability of energy systems and resources. The lack of centralised policies and frameworks was identified as a critical requirement to improve interoperability and ultimately, to positively contribute towards energy networks and energy markets.
Where to next for state-owned energy companies?
The State-Owned Energy Panel discussed the future of state-owned electricity enterprises and the critical role they will play in the future. The panel emphasised that, going forward, state-owned enterprises need to actively invest in the gaps in the renewable energy cycle where returns are traditionally lower, to unlock additional private investor capital towards projects that are more investor-friendly.
What do leading Australian corporates want from a PPA partner in 2023? A Bootcamp for Developers
The PPA Panel explored the biggest barriers to power purchase agreement (PPA) uptake. The panel explained that the most significant barriers included shareholder sentiment, CEO buy-in and the business being comfortable with the long tenure of PPAs. The panel emphasised the importance of explaining the benefits of PPAs to clients, including the strategic value of an asset in their portfolio, as well as the additionality and secondary benefits of a PPA.
In addition, the panel stressed the need to understand the drivers of corporate offtakers, including concerns around counterparty and delivery risks. Given PPAs are long-term partnerships, the panel advocated for the alignment of values between parties and the proper assessment of capability and resources to reduce counterparty risk.
ESG and social licence was a key topic of discussion. The panel highlighted the importance of effectively embedding ESG in a PPA and tailoring the sustainability components to suit the nature of the development and/or the sustainability goals of the corporate offtaker. The panel saw ESG and sustainability connected to reputation, brand value and effective risk management. They stressed the importance of taking ESG seriously and incorporating ESG elements in project risk management. The key challenges facing the market include labour shortage, rising costs and supply chain interruptions.
Authentic community voices: The on-ground experience of the energy transition
The Community Engagement Panel explored the importance of community engagement by project developers. The discussion touched on the topic of “engagement fatigue” of stakeholders, and the importance of developers understanding the impact of their projects on the community. This included the potential impact of an influx of labour force during the development phase on a community’s infrastructure, such as an increase in the cost of affordable rental properties or access to resources.
The panel highlighted the importance of a transparent decision-making process from developers and the government. In particular, it is important to provide the community with clear information that highlights the benefits and drawbacks of the project on the community. Developers should view landholders as long-term partners. By encouraging landowners to invest in projects, the landowners will become stakeholders in the project and will be able to better assist developers.
Long Duration Energy Storage technologies and development
At the neighbouring Energy Next conference, the Long Duration Energy Storage Panel highlighted long duration energy storage (LDES) as the key driver of the global energy transition to a sustainable grid, especially in tackling the ‘duck curve’ challenge of timing imbalance between solar power generation and peak demand. As discussed in McKinsey’s report on LDES, up to 140TWh of LDES would be needed by 2040 for full global grid decarbonisation. Lucas Sadler (Energy Vault) addressed the need for cost-effective energy storage and energy management solutions to support grid integration resiliency.
EV Charging Infrastructure: Where we are and what’s to come
The EV Charging Infrastructure Panel highlighted public trust, market factors and the lack of infrastructure as deterrents to wider adoption of EV in Australia. The panel also discussed the need for low management infrastructure, intelligent systems and associated security concerns. The discussion highlighted the need for interoperability among technologies being utilised by different manufacturers, and emphasised the challenges that low interoperability posed to the development of better infrastructure and to large scale fleet electrification.
|The Clean Finance Panel||Geoff Dutaillis
CEO, Tilt Renewables
CEO, Aware Super
Global Head of Investments, Pollination
Executive Director, Rewiring The Nation, Clean Energy Finance Corporation
Global Head of Infrastructure, Energy & Utilities, Specialised Finance, NAB
Director, Policy, Investor Group on Climate Change
Director, ACEN Australia
|The Carbon Market Panel||Phil Cohn
Managing Director. Pollination Group
EGM, Energy Markets, Iberdrola
Head of Energy Transition, ANZ
Director – Analysis & Advisory, Green Energy Markets
CEO, Zen Energy
General Manager Policy, Markets & Data Branch, Clean Energy Regulator
|The Distributed Energy Panel||Con Hristodoulidis
Director Distributed Energy, Clean Energy Council
Head of Network Strategy, SA Power Networks
Dr Andrew Mears
Energy Policy Manager, Tesla
Executive General Manager – Reform Delivery, AEMO
Technical Director, Solaredge
|The State-Owned Energy Panel||Dennis Freedman
Head of Generation, Ampol
Managing Director, Palisade Investment Partners
CEO, State Electricity Commission
Executive General Manager, Future Energy, CS Energy
Principal, Boardroom Energy
|The PPA Panel||Jackie McKeon
Program Director, Business Renewables Centre Australia
Head of Project Finance, Squadron Energy
Sustainable Technologies Manager, Lion Pty Ltd
Head Renewable Energy Investments, Energetic
VP Commercial, SmartestEnergy Australia
Co-Chair, Energy industry, Ashurst
|The Community Engagement Panel||Annette Deveson
Chief Project Officer, RES
Commissioner, Australian Energy Infrastructure Commissioner
Cr Neil Westcott
Deputy Mayor, Parkes Shire in Central West NSW and 5th generation farmer
Managing Director, Geni.Energy
Chair, Mudgee District Environment Group
Landowner and Community Liaison Officer, Flat Rocks Wind Farm Stage 1 and Enel Green Power
The Hamilton Locke team advises across the energy project life cycle – from project development, grid connection, financing, construction, including the buying and selling of development and operating projects.
Matt Baumgurtel leads the New Energy sector team at Hamilton Locke which specialises in renewable energy, energy storage and hydrogen projects and transactions as part of the firm’s Energy, Resources, Construction and Infrastructure practice. The New Energy sector team has market-leading experience with hydrogen developments across Australian jurisdictions and are up-to-date with the latest national and international policy developments in the constantly evolving, dynamic hydrogen value chain.
For more information, please contact Hamilton Locke New Energy Partner Matt Baumgurtel.