With a resounding majority, Labor returns to government with a clear mandate to continue Australia’s energy transition. The message from voters is clear: the direction of travel is towards renewables.
Peter Dutton’s exit – and the failure of the Coalition’s nuclear-focused campaign to gain traction – puts the Coalition at a critical crossroads. Will it modify its energy position or double down on the nuclear strategy?
In contrast, the government has the parliamentary numbers and political capital to accelerate delivery of its renewable energy agenda – particularly household electrification, grid reform and renewable energy investment.
We break down what this means for the Australian energy industry.
Key themes
- Green light for renewables: Labor is spending big on domestic solar manufacturing, green hydrogen, and home batteries and will continue to underwrite new wind, solar and battery programs with its Capacity Investment Scheme (“CIS”).
- Renewables and fossil fuel energy mix: Labor’s commitment to renewable energy signals an expedited transition away from coal fired power generation. Consequently, gas is likely to serve as an interim measure to maintain energy security over the coming years. However, and in spite of its continued commitment to the CIS and 2050 net zero target, Labor has remained relatively quiet on specific measures and timelines to phase out fossil fuel generation. As Australia’s east coast risks gas shortfalls, there has been a recent push for the Australian Energy Market Operator (“AEMO”) to underwrite importing LNG into Australia for the first time. Given the Coalition’s campaign promises to delay the closure of coal-powered plants and to expand gas projects, and the Greens’ pledge to fight for a moratorium on new fossil fuel developments, it remains likely that key decisions on coal and gas strategies will be hotly debated in the next political term.
- Cost of living relief: Cost-of-living was a key voter issue in this year’s election, and it is notable that a number of Labor’s signature energy policies focused on removing barriers to entry for household installation of solar and battery technology, ownership of electric vehicles, and energy bill relief for Australian homes and small businesses. It is likely that these initiatives will find support from the Greens and Teal independents – many of whom also campaigned with renewable energy and electrification policies.
- Labor majority: Labor will be able to form government in its own right. As a result, there is a reduced need for the government to broker deals with Greens and Independents in the House of Representatives. However, support from the Greens and Independents may still be necessary to pass policies through the Senate. This means that, while Labor can pursue its agenda, the more progressive renewable energy policies from these groups might still influence the legislative process.
- Nuclear: The Coalition’s signature energy policy is now off the table, with Labor and the Greens and Independents focused on other sources of energy generation and a reduced interest in nuclear among the electorate.
Key Labor policies
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