‘Out of date’ green energy strategy to be overhauled

Australia’s energy and climate change ministers have agreed to update the national hydrogen strategy in response to global market interventions.

Federal Energy Minister Chris Bowen. Picture: NCA NewsWire/Gary Ramage

Australia’s energy and climate change ministers have agreed to overhaul the national hydrogen strategy in response to global market interventions and green hydrogen funding surges in the US, Gulf states, Canada and Europe.

As revealed by The Australian, energy and climate change ministers on Friday backed urgent federal, state and territory hydrogen policy changes to ensure Australia remains globally competitive in the transition from fossil fuels.

With international competitors steaming ahead in establishing hydrogen industry hubs, federal minister Chris Bowen said the national hydrogen strategy, developed in 2019 by former chief scientist Alan Finkel, was “out of date”.

“Australia can be a green hydrogen superpower. We can lead the world in green hydrogen production and in due course in export. But we have to have the right policies in place,” Mr Bowen said.

“(The strategy) needs to be revised and refreshed, particularly in light of international developments, including (the US) Inflation Reduction Act.”

Fortescue Future Industries and Deloitte Access Economics warned Australia was being left behind by the US, Gulf states, Canada and Europe, which have thrown money and resources at developing hydrogen industries.

The ministerial communique said governments endorsed a strategy that “positions Australia on a path to be a global hydrogen leader by 2030 on both an export basis and for the decarbonisation of Australian industries”.

“The review of the strategy will take account of developments globally and in Australia since the original strategy was developed, including the impact of the Inflation Reduction Act in the US and policies by other countries to support a hydrogen industry,” it said.

On transmission congestion issues, Mr Bowen said “we need to send signals to the market, to private sector investors, that we want to encourage dispatchable renewable energy into places where it best works most efficiently in the grid”.

“We have decided not to pursue any model which includes localised marginal pricing or a congestion management model,” he said.

“What we will do is adopt a model of a voluntary opt-in arrangement for renewable energy investors to join a capacity-to-relief model so that they can, if they are investing in the areas which are most efficient, develop a new product, a capacity relief product, which will then be tradeable and will provide that important market signal that investment should go where it’s most efficient and most necessary.”

Ministers endorsed a harmonised approach under the national electric vehicle strategy to boost incentives for EVs and speed up the rollout of chargers in remote and regional Australia.