Energy Market Update: Australia Is On A Path To Net Zero

Australia is on the path towards an emissions reductions target of 43 per cent by 2030 and net zero emissions by 2050.

Climate action and lower energy costs go hand in hand. In fact, pro-climate policies can have a significant impact on fuel and electricity prices.

According to the World Meteorological Organisation, 2021 was one of the hottest years on record. In fact, last year was the seventh consecutive year (2015-2021) in which global temperatures were over 1 degree celsius above pre-industrial levels.

In Australia, human activities are causing greenhouse gas emissions, which is driving a series of climate change phenomena. From the 2019-2021 'Black Summer' bushfires to the 'Weird Winter' of 2017; records are being broken at an unprecedented level.

However, climate change action can reduce these impacts and lower the burden of high energy costs on Australians.

The Federal Government's new legislation- the Climate Change Bill 2022-is expected to strengthen public and private clean energy investment at a time when the sector has been battered by a series of cascading events.

From The Chamber To The Household

The Federal Government's climate change legislation puts control back into consumers who have access to new technologies.

This will place downward pressure on the electricity grid and ultimately lower prices.

"The passage of the Climate Change legislation sends a message to the world that Australia is serious about driving down emissions, and serious about reaping the economic opportunities from affordable renewable energy,"said Chris Bowen, who is the Minister for Climate Change and Energy.

Importantly, by unlocking a new era of renewables technology, which incorporates Australia's vast natural resources, it decreases financial pressure on homeowners.

The Australian Energy Market Operator believes wholesale power costs soared in the three months leading up to June this year. In fact, prices for the quarter rose to $264 per megawatt hour on average.

"Legislating these targets gives certainty to investors and participants in the energy market and will help stabilise our energy system."

"It also strengthens transparency and accountability through the annual climate change statement and will ensure public debate informs government decisions", Mr Bowen said.

When Will This Come into Effect?

The Federal Government's plan seeks to minimise disruption to households while the technology is put into place.

In the long-term, energy prices will begin reflecting the environmental and social costs of its use and production.

By capitalising on Australia's resource-rich environment- particularly solar and wind-it places the nation as a domestic producer of energy.

For example, renewables currently account for around 20 per cent of Queensland's electricity. However, 70 per cent comes from black goal and gas, which leaves Queenslanders vulnerable to the impacts of the global energy crisis.

But investment in renewable energy means Australians can enjoy energy that is produced and stored onshore, without relying on international factors and unsustainable solutions.

Can I Start My Own Research?

If you are seeking to change your energy providers to a more sustainable and affordable option, compare & connect can help you.

Contact us today for the latest information on energy prices and choosing the best provider for you.