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While the Coalition’s, who by all learned commentators’ opinion are poised to form the next government, response to the Budget has essentially been confined to the credibility of the Treasurer, the forecasts and assumptions underpinning spending cuts.

The Government has asserted that our national economic health has been adversely affected by a one in 50 year downturn in revenue.  The Opposition has in turn rebutted by pointing out that revenue is $80 billion dollars more today than in 2007 but it is accompanied by expenditure which is $120 billion more than 2007.  No doubt these political arguments will continue for the next four months.

From the EUAA perspective the Budget contained very little of consequence to members.  Many of our concerns are not tied up in the budgetary processes but rather in already legislated programs and regulations.

That being said, in my years of political representation I have learned that the “nasties” that often come out to bite us may be buried deep within the Budget papers and take weeks to surface.

Already we have had commentary from Queensland as to the imposition of more unnecessary green tape on the resources sector, requiring federal assessment and approval of CSG and coal mining developments.  It is yet unknown what the impact of this one seemingly inconsequential measure may be on members’ concerns about supply and price.

A broad summary of Budget announcements as it impacts the resources, energy and climate change portfolios is listed below.

1.  Carbon Price

Based on Treasury modelling the expected carbon price in 2015 has been more than halved from $29 to $12.10 a tonne – a reflection of the “profound economic weakness in Europe” and its impact on the EU Emissions Trading Scheme.

Although Carbon prices for emissions are projected to be $12.10 (2015/16) and $18.60 (2016/17), longer-term prices are projected at $38 in 2019-20.  If recent evidence of the movement in the Aussie dollar continues, the real cost will be higher.  The price level is required over time to meet long-term global environmental goals and international commitment pledges for 2020 (this of course is pure speculation as the ongoing international commitments from both a future Australian government and our major international trading partners is the source of constant conjecture).

The tax cuts related to the carbon price will be postponed until the carbon price exceeds $25 – this is not expected until 2018-19.  These tax cuts have already been legislated which means the Government will need to have the laws amended in both Houses of Parliament.  This is one of those issues aimed at wedging the Opposition and testing the relationship with the Greens.

2.  Portfolio Related Spending Cuts

With the significant fall in revenue from the lower carbon price of $6 billion the Government has significantly reduced expenditure to a number of support programs including:

ARENA
$370ml reduction in funding for the Australian Renewable Energy Agency (ARENA).  New renewable technology will find it difficult to secure funding to bring it to market.   ARENA administers a number of funding programs in support of research and development, and demonstration and commercialisation of renewable energy technologies (such as the Solar Flagships Program). Its model involves the commitment of significant tranches of money for new, though unproven, technology expected to deliver energy efficient power. The Coalitions’ policy on ARENA is not yet clear although this funding model has not previously been supported by the Coalition.

CCS Funding
The 2013-14 Budget will see $500 million of Carbon Capture and Storage (CCS) Flagships program funding withdrawn over three years.

This will no doubt disappoint many of the players in the oil, coal and gas energy sector. These programs were all aimed at prolonging the life span of our fossil fuel industry in vital resource rich regional communities, as a source of cleaner energy in the face of the emergence of renewable energy sources.

Clean Technology Fund
The clean technology fund, in the words of the Minister, has been “reprofiled”  - it will provide $1.2 billion over seven years to further support manufacturing and a refined synthetic greenhouse gas destruction program.  The funding is aimed at facilitating a potential earlier take up by industry. Earlier take up will mean a greater chance of industry stimulus and a greater absorption of the scheme within affected industries.

This is potentially good news for those manufacturers in the high intensive energy industries – particularly foundries and food processing.  Only as recently as a week ago the Prime Minister announced funding for Fonterra in Tasmania under this grant allocation.


“Through this fund, Australian manufacturers can invest in energy efficient capital equipment and low emissions technology on any scale to make a real difference to their energy consumption and save on their energy bills,”  Minister Combet said.

It is claimed by the Government that projects announced so far have delivered energy and productivity savings of more than $30 million per year, and almost 25 per cent of these projects are achieving reductions in emissions intensity of more than 50 per cent.

The Opposition has pledged to scrap these industry support programs on the basis that they will not be required when the carbon tax is abolished and its Direct Action Policy is implemented.

Coal Industry
In addition $29 million in funding will be withdrawn from the Coal Mining Abatement Technology Support package, $88.2 million from the National Low Emissions Coal Initiative and $274.2 million from the coal sector jobs package.

The coal industries response is not surprising with the comment, “As a global community we are massively reliant on fossil fuels and CCS is the only proven technology that can substantially reduce emissions from carbon intensive industry. Not only is cutting CCS counterproductive from a climate perspective it also undermines the future strength of our coal export industry which delivers vital jobs and revenue for Australia,” Acting CEO, Mr Greg Sullivan said.

Softer emission prices have created a carbon black hole in regards to revenues expected from the Carbon Tax. In response, EUAA will be calling on the Government to review ongoing compensation to brown coal generators in light of its belated recognition of softer emission prices.

RET and NEM Comment
Minister Combet Press Release, May 15:  “… I think we’ve got a very comprehensive set of measures that are starting to transform our economy. And just as part of that, the effect of the carbon price in our National Electricity Market is already becoming evident. Renewable energy generation is up 30 per cent since the carbon price came into effect. The highest polluting coal fired power stations, which are mainly in Victoria, their greenhouse gas emissions are down 16 per cent and yet the world hasn’t ended. We’re just cleaning up our greenhouse gas emissions but the economy remains strong – something not to be lost sight of – still growing at around 3 per cent, unemployment is at 5.5 per cent, inflation is low, interest rates are at very significant low’s and the economy is in pretty good shape.”

In light of the Government’s softer emission price forecast we continue to express our concerns on the impact the existing RET policy has on energy costs. The RET and its costs to users must be reviewed in light of these forecasts and changing demand levels.

Responses to Portfolio cuts from “green advocates”.
The reduction in funding for a range of support programs has drawn criticism from the Greens, Climate institute, Clean Energy Council and Australian Conservation Foundation (ACF) among others.

The Government has defended its budgetary decisions impacting the energy sector on the basis that it is a reflection of the collapse of the European carbon price and the overall reduction in government revenue. They also claim through various statements that it is also a reflection of the success of the scheme in the first year of operation as judged by reference to emission reduction targets, impact on households, changed industry and consumer behaviour and investment in clean technology.  No doubt, this is a matter of great debate.

What we do know with certainty is that the Budget announcements on Tuesday night are not the last word on the matter – not only do we still need to wade through the “nasties” but we also know the entire portfolio area will be front and centre in the political debate leading up to the September election.

To this latter point, the EUAA together with your feedback will help to drive our message to the various decision makers – this is a time for you to be heard and represented.

I welcome your opinions on the Budget announcements impacting the energy market. Please feel free to email your concerns, feedback and policy positions to euaa@euaa.com.au with the subject heading Federal Budget response. Remember, your input ensures the EUAA can properly represent your views to policy makers in Canberra.

I look forward to hearing from you soon.

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This document could also be of some interest to personnel in your organisation that have responsibility for dealing with suitable incentives in contracts and can be viewed by members here

Our response to the AER must be summated by May 10.  In that regard can you please provide feedback either to myself or alternatively to Mr Bruce Mountain any comments you wish to make by Thursday May 9th.

My contact details are below. Mr Mountain can be contacted on 03 9664 0680 or bruce.mountain@carbonmarkets.com.au

Look forward to your contribution.

Phil Barresi
CEO
Energy Users Association of Australia
03 9898 3900
Phil.barresi@euaa.com.au

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My top priority is to seek your support and input into driving policy initiatives that can deliver affordable energy prices for Australian businesses and families.

I understand the seriousness of soaring energy prices on your bottom line and what these increases can mean for the sustainability of your business. My focus is to engage with policy makers to ensure affordable energy prices for businesses like yours are on their agendas.

The upcoming federal election presents us with a unique opportunity to ensure your voice is heard on both sides of politics and, on behalf of EUAA members, over the next few months I will be seeking to meet with relevant Ministers about their energy policy positions.

Building on my substantial experience with various industry associations and 12 years in federal parliament, I’m confident the EUAA can constructively work with our members to influence policy makers during such a challenging time.

You have told us the following energy issues are your priorities as they have a direct impact on your power bills and, ultimately, on your bottom line:

• Reducing network costs;
• Addressing current regulatory barriers;
• Ensuring affordable gas supplies; and
• Policy directions on emissions reductions and
• Renewable energy policies that are cost effective for all end-users.

Your energy concerns are the EUAA’s top priority and now it is my imperative to ensure your voice is heard by policy makers.

An association like ours can only be strengthened by having greater participation from its members. Over the coming months, you will be invited to participate in various forums as we consult with you to refine our message for policy makers.

There is no other organisation in Australia with the credentials of EUAA to represent the needs of energy users in our rapidly evolving and volatile energy markets. The benefit of our research and advocacy doesn’t stop with our members but continues right through the user chain to all Australian businesses and families.

I look forward to working with all of you on the energy issues that impact your bottom line to help your business grow and prosper.

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As the newly appointed Chief Executive Officer of the Energy Users Association of Australia (EUAA), I am honoured to take on the responsibility of steering the organization through the energy challenges facing you, our members.

My top priority is to seek your support and input into driving policy initiatives that can deliver affordable energy prices for Australian businesses and families.

I understand the seriousness of soaring energy prices on your bottom line and what these increases can mean for the sustainability of your business. My focus is to engage with policy makers to ensure affordable energy prices for businesses like yours are on their agendas.

The upcoming federal election presents us with a unique opportunity to ensure your voice is heard on both sides of politics and, on behalf of EUAA members, over the next few months I will be seeking to meet with relevant Ministers about their energy policy positions.

Building on my substantial experience with various industry associations and 12 years in federal parliament, I’m confident the EUAA can constructively work with our members to influence policy makers during such a challenging time.

You have told us the following energy issues are your priorities as they have a direct impact on your power bills and, ultimately, on your bottom line:

• Reducing network costs;
• Addressing current regulatory barriers;
• Ensuring affordable gas supplies; and
• Policy directions on emissions reductions and
• Renewable energy policies that are cost effective for all end-users.

Your energy concerns are the EUAA’s top priority and now it is my imperative to ensure your voice is heard by policy makers.

An association like ours can only be strengthened by having greater participation from its members. Over the coming months, you will be invited to participate in various forums as we consult with you to refine our message for policy makers.

There is no other organisation in Australia with the credentials of EUAA to represent the needs of energy users in our rapidly evolving and volatile energy markets. The benefit of our research and advocacy doesn’t stop with our members but continues right through the user chain to all Australian businesses and families.

I look forward to working with all of you on the energy issues that impact your bottom line to help your business grow and prosper.

Yours sincerely,

Phil Barresi
CEO, Energy Users Association of Australia (EUAA)

Email: phil.barresi@euaa.com.au

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Map and Directions | Register

Description:

As Australia transitions to a higher energy cost economy more Australian industries are beginning to dedicate resources to the challenges of keeping energy costs under control.

The role of the Sustainability Manager is being dominated by energy and carbon issues requiring these specialist roles to become more energy management capable in developing energy programs and driving cost reduction initiatives.

Energy Management for Sustainability Managers 1 day program will provide participants with the knowledge required to initiate or progress energy plans and programs in the built environment, mine sites and industrial and manufacturing sites.

The program is structured such that participants only focus on topics that apply directly to them and their business.  They will have access to processes, practices and tools, at no additional cost, to review develop and maintain an energy management system that delivers energy cost savings.

Learning Outcomes:

• Recognise the strategic motivations of business to invest in energy management.
• How to align their energy management system with recognised energy management standards
• The development of a program that supports business goals
• How to integrate energy efficiency into your continuous improvement systems
• How to engage teams about energy efficient practices and projects
• How to establish or plan to improve your Energy Management System
• What tools to use

Who should attend?

EUAA and our partner Energetics have designed this course for participants with little or no previous knowledge of energy management but it is also suitable for those that have some understanding and are looking to update their knowledge.  It is specifically relevant for:

• Sustainability Managers, Energy Managers, Production Managers, Building Managers, Business Owners, Team Leaders Senior Managers and others with an interest in understanding Energy Management.

Empower your team to be energy champions so they can reduce your energy costs and carbon footprint. Register 3 or more and receive a 10% discount.

Early Bird – Book and pay before 10 June 2013

Further details can be obtained by calling us on 03 9898 3900 or emailing euaa@euaa.com.au

Register

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