In an in-depth review of Australia’s energy policies released Monday, the International Energy Agency (IEA) lauds the country’s ambitious goals for developing a low-carbon economy but warns that they will require significant investment.
“Australia has taken many positive steps since the last in-depth review in 2006,” IEA Executive Director Maria van der Hoeven said at the launch of the report, Energy Policy of IEA Countries: Australia 2012. “The IEA strongly supports Australia’s continuing efforts to increase and improve low-carbon energy in the country.”
Best known as a producer of coal and natural gas, Australia is the world’s ninth‐largest energy producer and, with Canada and Norway, one of only three net energy exporters in the OECD. Notably, Australia is a significant investor in low-carbon technologies and, with its extensive wind, solar and geothermal resources as well as large biomass and ocean energy potential, has begun transitioning to a clean-energy economy.
The scale of Australia’s energy policy ambitions is enormous and will be very costly even for a resource-rich nation, the IEA review says. To sustain progress on conventional resource production as well as development of new technologies, Australia must have continued access to a large pool of highly qualified labour to maintain experienced research communities. The report recommends that the federal and state governments use education and training to address possible workforce shortages and also seek to attract qualified workers from overseas.
Ms. Van der Hoeven welcomed the government’s Energy White Paper 2012, released earlier this month, commending its broad sweep of measures in relation to clean energy. Australia has made a strong financial commitment to carbon capture and storage, the expansion of renewable energy and the establishment of the commercially oriented Clean Energy Finance Corporation, which will invest in renewable energy low‐emission and energy‐efficient technologies.
She also backed Australia’s recent introduction of a price for the emission of carbon and proposals to reform Australia’s electricity market in an effort to tackle rising prices.
“The IEA views carbon pricing as a critical component of climate policy, and we hope its introduction in Australia will put an end to much uncertainty in the energy sector,” she said. “But even with a carbon price, Australia will need supplementary policies, like energy-efficiency policies to unlock low‐cost abatement and technology policies to help lower the long-term cost of new technologies, including renewable energy and carbon capture and storage. Commendably, Australia has developed a relatively balanced package with strong elements of each policy.”
The IEA review also raises a serious concern related to Australia’s non-compliance with its IEA obligation to maintain oil stocks at levels equal to at least 90 days of net imports. While Australia has been working with the IEA to address its stockholding obligation, the review strongly urges the government to take immediate action to become fully and systematically compliant with its stockholding commitment.