LinkedIn-Post from Nick Maher (Special Counsel, SEC Newgate...

LinkedIn-Post from Nick Maher (Special Counsel, SEC Newgate Australia; Source: https://www.linkedin.com/posts/nickmaher1_greenenergy-activity-7053552939331702784-UGTJ?utm_source=share&utm_medium=member_desktop)

Similar to the US, which has just thrown $400bn in subsidies at green energy, Treasurer Chalmers flagged today that he saw the potential to use climate change as a catalyst for an industrial policy to remake Australia’s economy, based on cheap clean energy.

A roundtable of energy investors will be held in Brisbane on Friday, where the Treasurer is likely to report back on the G20 summit discussions he attended on the enormous implications of the Biden Administration's moves to decarbonise and retool the World's leading economy.

The magnitude of this spend, under the Inflation Reduction Act, give the US a massive uplift in clean energy innovation, and poses both opportunities and threats to the global economy.

The biggest issue is whether any other country or even an economic grouping such as the EU can compete with such a massive and unrivalled subsidy of its clean energy sector, paving the way for US dominance in energy innovation.

This is particularly a headache for Australia, which is concerned its green hydrogen ambitions will be dashed, swamped by US subsidies that will likely see America establish early market leadership in hydrogen commercialisation.

While Australia can’t whistle up anything like $400bn in subsidies, Chalmers indicated today that he saw advantage in better co-ordination across his own government and private investors on where best to maximise Australia’s competitive advantages in both sources of renewable energy, but also in critical minerals to feed the global green revolution.

Ominously, Chalmers asserted that Australia could be the “beneficiary or the victim” of America’s re-industrialisation underway, indicating there are concerns about how to compete with such a juggernaut.

This adds a new and highly ambitious dimension to Australia’s economic policy, seeking to combine energy, resources and industrial policy to work together for an historic transformation of the Australian economy, however, without the huge subsidies available in the US to grease the wheels of such major change.

This is quite a challenge for Australia, as the EU is considering a similar massive green stimulus to the US, which could leave us behind in many global opportunities in green tech.

Australia now has largely its energy policy architecture in place, with net zero 2050 targets and a revised Safeguard Mechanism legislated, and a new Electric Vehicle policy package set to be announced this week.

This means Australia’s climate policy moves to the execution phase, requiring a 9 fold increase in large scale wind and solar, 30 times more storage, and at least 10,000 km of new transmission.

This will require huge licks of both public and private investment, however the concern is that the sheer attractiveness of the green subsidies available in the US, may suck in much of the global private investment looking for a high return homes in clean energy. #greenenergy