Australian Federal Budget October 2022-23: Energy

The Government has announced funding to support households and enterprises to upgrade key energy infrastructure, including generators, grids, and batteries. It will also provide investment to clean energy initiatives, including solar banks and a new hydrogen hub.

Improving reliability and efficiency

• National Energy Transformation Partnership: The Government will provide $157.9 million over 6 years from 2022–23 (and $1.1 million per year ongoing) to support the implementation of the National Energy Transformation Partnership which will deliver cleaner and more secure and reliable energy for Australians. Funding includes:
  • $63.9 million over 4 years from 2022–23 to develop mechanisms to ensure firming capacity for the National Electricity Market, manage future generator closures and support large scale battery projects.
  • $23.0 million over 3 years from 2022–23 to make changes to Australian Energy Market Operator’s powers and the National Gas Rules to increase the security, resilience and reliability of the east coast gas market.
  • $18.9 million over 4 years from 2022–23 (and $1.1 million per year ongoing) to improve energy planning by developing analysis of Australia’s regional energy supply and demand.
  • $15.2 million over 4 years from 2022–23 to develop a National Energy Performance Strategy to manage Australia’s energy demand.
  • $15.1 million over 6 years from 2022–23 to enhance Australia’s energy security by identifying and proactively managing emerging energy system risks.
  • $9.6 million over two years from 2022–23 to establish the Partnership’s implementation and governance framework.
  • $5.5 million over 3 years from 2022–23 to co-design and commence implementation of a First Nations Clean Energy Strategy in partnership with First Nations communities.
  • $4.6 million in 2022–23 to progress expanding and modernising the Greenhouse Energy Minimum Standards program and the Nationwide House Energy Rating Scheme.
• Rewiring the Nation: The Government will provide $20.0 billion in funding to establish Rewiring the Nation to expand and modernise Australia’s electricity grids at lowest cost, unlocking new renewables and storage capacity and driving down power prices. Rewiring the Nation will be managed by a new Rewiring the Nation Office (RTNO) within the Department of Climate Change, Energy, the Environment and Water, with the Australian Energy Market Operator as a technical advisor and the Clean Energy Finance Corporation (CEFC) to act as the financing arm for the program. Funding includes:
  • $20.0 billion in funding to provide concessional loans and equity to invest in transmission infrastructure projects that will help strengthen, grow and transition Australia’s electricity grids.
  • $50.4 million over 4 years from 2022–23 to support the operating costs for the CEFC to deliver concessional loans and equity through Rewiring the Nation and manage finance-related negotiations.
  • $18.1 million over 4 years from 2022–23 to establish the RTNO to manage coordination, community engagement, and negotiation with the states and territories for the delivery of Rewiring the Nation projects.
  • $9.4 million over 4 years from 2022–23 to deliver reforms to transmission regulations, including the regulatory investment test for transmission, and designate projects as ‘Nationally Significant Transmission Projects’ to overcome barriers to the delivery of transmission projects.
  • $5.8 million over 3 years from 2022–23 to conduct a review of the Integrated System Plan and transmission frameworks in other jurisdictions, to improve the effectiveness of energy system planning for the transition of the electricity market away from fossil fuels.
• Diesel Exhaust Fluid Market Security: The Government will provide $49.5 million over 4 years from 2022–23 to increase the security of the diesel exhaust fluid (DEF) market in Australia. This includes:
  • $45.0 million over 4 years from 2022–23 to secure a stockpile of 5 weeks of emergency supply of technical grade urea, a key ingredient for DEF, and to create a grant program for small-scale DEF manufacturing projects.
  • $4.6 million over 4 years from 2022–23 to establish an online data collection and reporting mechanism for the DEF market.
• Energy efficiency grants for SMEs: The Government will provide $62.6 million over 3 years from 2022–23 to support small to medium enterprises to fund energy efficient equipment upgrades. The funding will support studies, planning, equipment and facility upgrade projects that will improve energy efficiency, reduce emissions or improve the management of power demand.

Modernising transport

• Driving the Nation Fund: The Government will provide $275.4 million over 6 years from 2022–23 as part of its election commitment to double the Commonwealth’s investment to $500 million and establish the Driving the Nation Fund to invest in cheaper and cleaner transport. This includes:
  • $146.1 million over 5 years from 2023–24 for the Australian Renewable Energy Agency to co-invest in projects to reduce emissions from Australia’s road transport sector.
  • $89.5 million over 6 years from 2022–23 for the Hydrogen Highways initiative to fund the creation of hydrogen refuelling stations on Australia’s busiest freight routes, in partnership with states and territories, including $5.5 million to LINE Hydrogen Pty Ltd for its George Town green hydrogen heavy transport project.
  • • $39.8 million over 5 years from 2022–23 to establish a National Electric Vehicle Charging Network to deliver 117 fast charging stations on highways across Australia, in partnership with the NRMA.

The Government will also provide $14.0 million over 4 years from 2022–23 for the Australian Automobile Association to conduct on-road emissions and fuel consumption testing of light vehicles sold in Australia.

Reaching Regional and Remote Australians

• First Nations community microgrids program: The Government will provide $83.8 million over 4 years from 2022–23 to develop and deploy microgrid technology across First Nations communities, to increase access to cheaper, cleaner and more reliable energy. The microgrid projects will be developed in consultation with Aboriginal and Torres Strait Islander groups, First Nations clean energy experts and the states and territories.
• Powering the Regions Fund: The Government will establish a Powering the Regions Fund from 2022–23, with $1.9 billion allocated from the uncommitted funding from the Emissions Reduction Fund, the Climate Solutions Fund and the Safeguard Mechanism Crediting to assist industries, regional Australia and communities with the transition to net zero emissions. Initial funding includes:
  • $5.9 million in 2022–23 to support reforms to the Safeguard Mechanism that will assist covered industries with the transition to net zero.
  • $3.3 million in 2022–23 for further design and development of the Powering the Regions Fund.
  • $0.8 million in 2022–23 for an independent panel review of the Australian carbon credit unit market.

The Fund will also continue to support reverse auctions by the Clean Energy Regulator for Australian carbon credit units.

Investing in clean energy

• Solar Banks: The Government will provide $102.2 million over 4 years from 2022–23 to establish a Community Solar Banks program for the deployment of community-scale solar and clean energy technologies. Funding will improve access to clean energy technologies in regional communities, social housing, apartments, rental accommodation, and households that are traditionally unable to access rooftop solar.
• Townsville Hydrogen Hub: The Government will provide $71.9 million over 7 years from 2022–23 to deliver a new green hydrogen hub in the Townsville region of Queensland.
• Offshore renewables: The Government will provide $0.5 million in 2022–23 to develop an offshore renewable energy industry growth strategy to support the development of offshore renewable projects in Commonwealth waters.
• Community batteries for household solar: The Government will provide $224.3 million over 4 years from 2022–23 to deploy 400 community batteries across Australia to lower bills, cut emissions and reduce pressure on the electricity grid by allowing households to store and use excess power they produce.