APA boss warns on energy transition targets

APA Group chairman Michael Fraser has called for realistic policies to move the energy transition forward while keeping the lights on. He warned that rolling blackouts and further substantial increases in the cost of energy caused by a lack of reliable generation and gas supplies would see public support for the transition evaporate overnight. Speaking at the company's annual shareholders meeting, Mr Fraser said APA was committed to achieving net zero operational emissions for its power generation and electricity transmission infrastructure by 2040 and for its gas infrastructure by 2050. APA Group chairman Michael Fraser. "But as we and the rest of the country drive towards our net zero targets, we need to remain aware of the significant challenges in achieving this lower emissions future while at the same time maintaining a reliable and affordable energy system," he said. "It seems abundantly clear that even with the industry’s best endeavours and most optimistic view of the road ahead, there are several factors at play that will inevitably delay the achievement of Australia’s renewable energy targets and hence emissions reduction targets." These included global competition for skilled labour, critical minerals and equipment supply as well as inflationary pressures impacting project costs and the glacial pace of the project approval processes, he said. "Not to mention that increasingly interventionist energy policies across Australia have also, in a number of instances, rattled investment confidence and there is also significant ongoing local community opposition to new electricity transmission and renewables projects." He said the Victorian and NSW governments had been negotiating deals to extend the operating life of coal-fired generators out of necessity. "You can do that at relatively short notice when you are dealing with existing assets. You can't do that at short notice when the assets – like essential gas firming generation or new natural gas resources need to be developed," Mr Fraser said. "At APA we want to be part of the solution. That’s why we are not only investing in renewable and electricity transmission assets as well as hydrogen opportunities, but we’ve also taken the initiative at our own risk, to invest in expanding the capacity of our East Coast Gas Grid. "We’ve done this because it is obvious to us that given the dwindling natural gas supplies in the southern states that more gas will need to flow from north to south in the years ahead." He stressed the need for government policies to ensure there were adequate new gas supplies and new reliable gas firming generation capacity before it was too late. "Gas is essential for generating industrial heat used in the manufacture of basic building products like bricks, steel and cement," he said. "It is also essential to the production of ammonia-based fertilisers for the agricultural sector and explosives used extensively in the mining industry. And gas is also critical to powering our mining and resources projects that are so critical to jobs, our economy and the energy transition itself. "So if we don’t take action and alleviate gas supply pressures, not only are governments putting energy reliability at risk, they are also adding to the cost of gas and, in turn, further stoking cost-of-living pressures and the housing crisis. "Now is the time for all levels of government to take out insurance in the form of policies that ensure the energy transition is as rapid as possible, without causing major disruptions socially and economically to the country. "If they don’t, no one will forgive them when the lights go out, when higher energy bills need to be paid and when future governments need to pay yet again to extend the life of whichever emissions-intensive coal-fired generators are left standing at the time."

APA boss warns on energy transition targets

Industry Queensland

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