Thirteen things on Labor’s climate and energy must-do list to change the system

The thumping victory for Labor in the weekend’s poll means that it is likely to be in power for at least another six years.

It has set renewable and climate targets that might be difficult to meet, but which really need to be even more ambitious if it is to respect the science, and seize the opportunities of a green energy economy. But, without the Teals or Greens pushing it in minority government, the momentum will have to come from within.

There is near universal acclaim in the energy industry on the work and effort of Labor’s climate and energy minister Chris Bowen, who has probably been the best in the role for more than a decade. Still, his future is not 100 per cent certain and his new sidekick, assistant minister Josh Wilson, is fighting for electoral survival in his seat of Fremantle.

The industry hopes Bowen will be asked to continue in the job – and not just because he actually reads their submissions, and has struck up a great working relationship with the states, something that his predecessor Angus Taylor didn’t even bother to try.

But as good as Bowen has been, his record is not perfect, and he has a bunch of challenges and key timelines in front of him. And some major set pieces in the coming year. Here’s a list of the 13 most important. Please let us know if you think there is anything we have forgotten, or you think we should add.

Reach the 2030 target of 82 per cent renewables

Bowen has insisted that the 82 per cent renewables target for 2030 is still achievable, although the number of people agreeing with him is rapidly diminishing. As Ketan Joshi points out in this piece on Labor’s four key numbers, that basically means Labor has got to lift the renewables share by 8.6 per cent a year until 2030. In the end, it may not matter too much if it falls short by a few percent, or if it needs a few years to get there.

To even get close will be a significant transformation of the Australia’s coal-based energy system. As AEMO’s Daniel Westerman says, there is no going back to baseload. But Bowen is going to have to make sure the Capacity Investment Scheme is delivered on time, and that other market signals are in place to ensure the extra capacity needed is built.

Achieve periods of 100 per cent renewables

If you want to achieve an average 82 per cent renewables by 2030, then the grid has to be capable of reaching periods of 100 per cent instantaneous renewables (or even more if excess power is to be stuck in batteries or pumped hydro. AEMO has already flagged that the country has reached occasions of “potential” 100 per cent renewables, but says one thing holding back reaching actual 100 per cent is the need for key system services such as system strength.

AEMO is not yet convinced that grid forming battery inverters can cover all bases on that score, so is looking in the interim to spinning machines, syncons, gas turbines that don’t burn gas, and repurposing existing machinery to do the job. That may be easier said than done, given shortage of new turbines and absence of market signals. Cue intense debate with the inverter community over what that technology can really achieve. It will be one of the more fascinating debates – at least among engineers – for the next few years. No one wants to do a Spain.

Rewrite the market rules

One of the most important items on the agenda this year is the review of market rules by a team of experts led by Tim Nelson. No one pretends anymore that the market rules are “fit for purpose”, having been run down by the pace of technology change, slow moving regulators, and the stubborn resistance of legacy companies determined to protect their turf and their revenues.

Nelson’s team have already signalled two priority actions are solving the issues of “tenor” – having enough revenue certainty over a longer enough period to land reasonably priced finance – and providing the market signals to bring dispatchable capacity on line, possibly without having a capacity market, per se. Listen to our interview with Nelson on his recent episode of Renew Economy’s weekly Energy Insiders podcast.

See also: Like any good opera company, the wind and solar industry is looking for a half decent tenor

But Nelson’s work may also bring about a fundamental change to the shape of the market. It may need to, particularly in light of the rise of consumer energy resources, and the unpleasant feeling from consumers that they are still being ripped off, even when they are providing the bulk of their own electricity needs.

Set a science-based climate target

Australia has had many emissions reduction and climate targets, but none have come close to observing the science. And it’s about time they did. If the reason they didn’t was the short-term electoral cycle and a government that didn’t actually believe the science, then now is the perfect opportunity to do the right thing (ffs), especially given that Labor seems locked in to government for six years.

That means bumping up Australia’s target of 43 per cent cuts by 2030 to at least a 75 per cent cut by 2035. That should be the bare minimum, and it will be fascinating to see the number produced by the Climate Change Authority, now led by the capable Matt Kean. Some – like the Climate Council – insist the target should be net zero by 2035. Maybe the government should start taking note of the likes of Andrew Forrest, who suggest that “real zero” targets, rather than the “net zero” favoured by governments, are what we should be working towards.

Host Cop31 UN climate conference in 2026

Australia has expressed its desire to host the Cop31 UN climate conference in 2026, although Turkey is also interested. It won’t be a landmark event, given that this year is a big deal because individual countries have to submit their 2035 climate targets this year ahead of Cop30 in Belem. But it will be an opportunity for Australia to leave a lasting positive legacy on global efforts to combat climate change, and to show vulnerable Pacific nations that it does actually care.

Trump’s US will not likely attend, and Australia will come under intense scrutiny over its status as one of the world’s biggest fossil fuel exporters. But it can create a vision of what being a world renewable superpower might look like, and South Australia, which should be getting close to its stated target of 100 per cent “net” renewables by the end of 2027 – with the bulk generation coming entirely from wind and – would be the perfect host.

The new Integrated System Plan

It is often forgotten that the first Integrated System Plan produced by the Australian Energy Market Operator was produced under the Coalition government, as was the second, and much of the 3rd. Labor, however, was the first federal government that bothered looking at it, and largely adopted it as a blueprint for its current energy policy.

It has had only minor tweaks in the last few editions, but this one could be different given the soaring cost of transmission, the delays in major projects, and the emerging opportunities in local networks, consumer energy resources (rooftop solar, home batteries, EVs and demand response), the developments in inverter based technologies and the falling costs of battery storage and solar panels.

First draft due in June, final report in December, but watch out also for a “distributed” ISP prepared by the likes of Ausgrid, Endeavour and Essential Energy, who are determined to put the case to build new renewables and storage on local networks, at a fraction of the price.

Phase out fossil fuels

To Climate Energy Finance, the re-election of the Albanese government means it must step up into global leadership on climate and renewables, as well as doubling down at home.

“Critically, we need to see a commitment from the ALP to no more greenfield fossil fuel project approvals if it is to honour its climate pledges, and a definitive policy and investment pivot to the zero-emissions future. This is where our national prosperity and energy security lie,” CEF director Tim Buckley said on Tuesday. 

“If you want to host the COP with the Pacific [Island nations] that are currently trying to survive climate change in their homelands… coal and gas is going to come up, and you’re going to have to have a process to deal with that,” says the Australian Conservation Foundation’s Kelly O’Shanassy.

“The issue is exports, which is our major contribution to climate change, that they haven’t really got a strong plan on,” O’Shanassy adds. She says the first big test of the re-elected Albanese government will be on May 31, when it is due to make an EPBC decision about the North West Shelf gas project, which owner, Woodside, wants to extend to 2070.

The $2.3 billion Home Battery Scheme

One of the signature policy initiatives of the election campaign, perhaps even the only one of any substance, was the $2.3 billion home battery initiative, which promised solar households and small businesses a roughly 30 per cent discount on the cost of a solar battery – and promised to do so from July 01 if Labor was re-elected.

Team Bowen will now have to hit the ground running to get the Cheaper Home Batteries Program up and running by that date; and to ensure that the policy hailed as “the most important development in consumer energy” since the launch of national rooftop solar rebate (SRES) doesn’t have any hidden booby-traps for the industry or consumers and will do what it says on the tin – cut consumer bills while also driving down the cost of power for all.

As Smart Commercial Solar founder and managing director Huon Hoogesteger put it on Monday, “a new battery rebate for up to 50kW will stimulate a MASSIVE run on batteries. This will create a boom and, at some point, a bust.” The key will be putting as many checks and balances into the design of the scheme to ensure the market isn’t flooded with cheap and low quality products.

“We need interoperability, consumer protection, and clear rules of the game,” the Smart Energy Council – which has already worked long and hard with Bowen and his department on the design of the battery scheme – said on Monday. “And we need to make sure this scheme supports emerging tech like V2G (vehicle-to-grid), home energy management systems, and AI-driven orchestration.”

Regions and social licence

The Coalition may have been swept from most of their city and suburban based electorates across the country, but in some regional areas the vote for the Nationals actually rose, including in some areas targeted for large-scale wind, solar and transmission rollouts. New England and Riverina are prime examples. Which means that the government, and in particular renewable energy developers, must not forget that earning social licence, and treating the local community with respect, is a must if the green energy transition is to succeed.

“We may have finally achieved broad support, and finally killed the disingenuous nuclear strategy but it’s not enough,” Shane Quinnell, the head of development at WestWind Energy said on LinkedIn on Tuesday. “We have to move the needle on social license in the regions. We have to start working together to collectively create better value for landowners, neighbours and communities. We need to deliver real and tangible benefit – in whatever form that specific region needs.”

Andrew Bray, the national director of RE-Alliance, says politicians of all leanings now have a chance to “reset and come together,” to “stop the politicking” and work with communities in renewable energy regions to ensure that projects are done right. That means doing it in a way that benefits communities and minimises impacts on nature. Nexa Advisory’s Stephanie Bashir agrees. “The Nationals still hold many of the regional seats where the regions are hosting the key energy transition infrastructure.  That means Regional Australia matters.”

Bray is a fan of Local Energy Hubs, that ensure regional communities have the information and resources to participate in and benefit from the energy shift that is underway across the country.  “There is no stronger way to indicate to rural and regional Australia that you’re putting them first in the rollout.”

Environment and nature law reforms

This is not in the remit of the energy and climate minister, but well worth mentioning all the same. After failing to fulfill its first-term election promise to fix Australia’s “broken” nature laws, the Albanese government has promised this issue will be addressed early in its second term, including through the establishment of a national Environment Protection Agency. And environment and climate groups – frustrated by last-minute pre-election changes to Australia’s environmental laws to protect the toxic Tasmanian salmon industry – have promised to keep the pressure up and hold them to their commitment.

Dermot O’Gorman, the CEO of WWF-Australia, has called for the government to provide a timeline, scope and process for the reforms in the first 100 days of its second term, with a view to getting Bills tabled in the first year of Parliament. “On nature, there is a great deal of work to do, with nature protection in a worse state in 2025 than it was when the Albanese government came to office in 2022,” says Australian Conservation Foundation CEO Kelly O’Shanassy. “There can be no more delays, backtracking, or caving to business lobby groups and polluters: the re-elected Albanese government must fix Australia’s broken nature protection laws, now.”

In an interview with Renew Economy on Monday, O’Shanassy said that federal Labor could take much the same approach to prosecuting stronger environmental laws as it did for introducing ambitious renewable energy targets. “[With renewables] the government took it on as a whole-of-government priority, and they saw it as an opportunity for Australia, not a drag. And nature is the same thing – it’s the powerhouse of Australia’s economy.”

Consumer energy and electrification

In its most recent meeting in March, Australia’s federal and state energy ministers said work has started on 12 of the 14 national reform priorities outlined in the National Consumer Energy Resources (CER) Roadmap, and would get to work on the remaining two later this year (2025). The goal here is basically to ensure that consumers get a good deal out of the distributed assets across the grid, and not just the people that own them.

Solar Citizens says it is looking for more ambitious consumer energy solutions, particularly for those who are currently locked out of the benefits of rooftop solar including apartments dwellers, renters and people in social housing. “This will address cost of living concerns for Generation Z and Millennials who outnumbered Baby Boomers in this election for the first time, and put their trust in Labor,” said Solar Citizens CEO Heidi Lee Douglas.

Solar Citizens wants a taskforce to enable solar for renters, extend federal pathways for clean energy upgrades and electrification of apartments and commit to and deliver rooftop solar on 30% of social housing properties nationally.

Rewiring Australia CEO Francis Vierboom says his organisation will be encouraging the government to continue to accelerate electrification and bill savings for Australian households, including through support for finance that works for low income homes, a strategy for rental energy bills, and further incentives to drive down the upfront cost of electrification. “Too many homes are missing out, and more pathways to household electrification means lower bills and lower emissions sooner,” Vierboom said. 

Energy Efficiency Council Luke Menzel makes the point that energy efficiency, electrification and other demand-side measures aren’t only crucial to drive down the cost of energy, they will also be crucial to post-2030 emissions reduction.

“We will need a massive scale up in efforts to get households and commercial buildings off gas. We will need to support for manufacturers and food processors using low temperature process heat to electrify,” Menzel says. “We will need an ambitious energy efficiency target to manage the new load we’re putting on the grid. We’ll also need big reforms to our energy markets to value energy flexibility to help keep energy bills low as we work through this transformation.”

Energy Consumers Australia says there is a lack of necessary support for households and businesses to reduce their energy use and costs. “One Stop Shops are needed to help them access comprehensive, trusted information and fully benefit from the energy transition,” says Liz Stephens, ECA’s general manager of public affairs and strategy.

“We need nationally consistent minimum energy efficiency standards for all rental properties and mandatory disclosure of energy efficiency ratings at point-of-sale. [And] as more consumers exit the gas network, we want to see a national plan to ensure the transition to all-electric homes and businesses benefits all consumers.” 

Green manufacturing, green metals and green hydrogen

Pressure will also increase on Labor’s hopes to be a green energy superpower, which means having a green manufacturing industry underpinned by electrification and renewables, including in green iron, green steel, and those green hydrogen and green ammonia sectors that actually make sense.

Australia has the assets – in terms of wind and solar – but it is in a race with other countries for the capital to build these massive projects. As bp Australia’s country president and vice president on hydrogen, Lucy Nation, told the CEDA summit in Melbourne last week, capital for the world’s first lot of renewable hydrogen projects will flow to countries that “do the best job” of de-risking the sort of ground-breaking – and hugely expensive – projects necessary to get the nascent industry off the ground.

“Without customers, suppliers and governments working together to a common time-frame, these projects aren’t going to get built, and that’s why we’ve seen so many announcements in the press of companies going bankrupt because they can’t do the capital raising anymore, or projects being slowed right down,” Nation said. Tim Buckley, from Climate Energy Finance, says that with Labor returned to government, it is time to “grasp this moment of policy certainty” and use it to build investor confidence, crowding-in domestic and foreign financial capital at scale to underpin our transition.

“As our export partners decarbonise, we need to pivot with them,” Buckley says. “This involves refocusing away from exporting green hydrogen towards using hydrogen in industrial applications for decarbonisation of our world-leading mining sector. “It means extending our competitive advantage in renewables, so we can process our abundant resources onshore using clean energy. This will enable us to export value-added green iron, green aluminium, lithium and polysilicon – a more than $100 billion per annum value-added uplift for our economy, as we “embody decarbonisation” in our leading commodities and energy transition resources.”

Safeguard Mechanism and carbon markets

There has been a lot of controversy and dissatisfaction about the structure of the Safeguard Mechanism, and the integrity of the carbon markets, prompting the likes of Andrew Forrest to dismiss carbon offsets as a scam. But land use remains a significant part of Australia’s emissions, and it needs policies and actions to reduce those emissions.

The carbon markets people feel they have been getting traction with Wilson on the structure of new methodologies that can provide real emission reductions, and farmer income, and farming improvements – in much the same way that some farmers have turned to wind and solar to boost their incomes, and improve the yield and quality of their products.

The Carbon Market Institute’s John Connor says work is needed on the Safeguard Mechanism, particularly the declining targets after 2030, and bringing in key sectors such as trucking into the fold. The threshold for emitters also needs to be dropped. “We’re calling for a carbon market strategy. Let’s tie this all together – together,” he says.