Understanding Safeguard Reforms: Australia’s Bold Move Towards Greener Industries

safeguard reforms

In an effort to combat climate change, Australia has initiated a series of environmental regulations known as the Safeguard Reforms. These reforms began in July 2023 and are currently undergoing ongoing updates. In a nutshell, the goal is to align Australia’s industries with international standards for environmental practices, especially those concerning greenhouse gas emissions.

So, how are we going about this? Well, the government department overseeing these changes is closely studying what’s been successful in other countries. They’re identifying top-performing industries around the globe that are producing less waste and pollution. Then, they’ll use these examples to set ‘benchmarks’—or standards—for Australian industries.

Now, here’s where it gets interesting. Suppose a country like Japan invents a new, super-efficient technology that significantly reduces emissions. If it’s among the best in the world, it will set the standard for Australian industries, even if it was tailored specifically for Japan’s unique economic needs. So, Aussie companies will need to keep pace, adopting any new technology and training staff to use it.

There’s still much to be decided in this ongoing process. For example, annual benchmarks will initially drop by 4.9% each year until 2030. After that, it’s suggested that changes will occur in 5-year increments. This will be confirmed in consultations planned for 2027.

By the end of this year, we can expect to see the finalisation of these benchmarks. They’ll be incorporated into law and take effect in the financial year of 2024.

One area under specific review is the coal industry. A new rule is being introduced that covers all emissions related to coal mining, including waste gas. The goal is to have a single standard, or ‘production variable’, that covers all activities in the industry. This could potentially revolutionise how we manage waste and emissions from mining, and it will certainly keep coal companies on their toes!

However, these new regulations are still open for debate. Public consultations are currently ongoing, giving citizens and industries a chance to voice their opinions and concerns. If you want to have your say on these changes, make sure to submit your thoughts before the deadline on August 11.

Australia is taking a significant step towards greener industries. By adopting these internationally informed practices, we’re pushing for a cleaner, more sustainable future.

The team at Edge Utilities are passionate about renewables and sustainability, we are energy brokers with an eye on the planet. We are committed to helping businesses reach their net zero goals through renewable power contracts.
To discuss options and plans for your business contact us at save@edgeutilities.com.au  or call us on 1800 334 336 to discuss. 

Breaking Down the New Climate-Related Financial Disclosures: A Simple Guide

Edge Utilities_Climate-Related Financial Disclosures

The way businesses approach climate change is becoming increasingly important, and new Climate-Related Financial Disclosures are being created to guide this. This process gained momentum in 2021 with the formation of a group called the International Sustainability Standards Board (ISSB).

The ISSB dedicated 18 months to consulting with different industries, aiming to formulate a comprehensive guideline that encourages companies to be more transparent about their sustainability efforts. In June, they introduced a set of guidelines called the IFRS Global Sustainability Standards, designed to instill confidence in the information companies share regarding their sustainable practices.

Following this, the government has drafted a paper that outlines expectations for large companies. These companies will be required to report on their plans, risks, and opportunities related to climate change. The reporting must align with international standards and show the companies’ readiness to achieve the objectives of the Climate Change Act 2022.

The implementation of these rules begins on July 1, 2024. Initially, they will apply to Australia’s biggest companies, as defined by their revenue, asset value, and employee count. However, by 2027, companies categorised as “Controlling Corporations” under NGERS may also have to comply, even if they don’t meet the initial criteria.

Companies will be mandated to disclose various information, including data on their emissions, plans to meet climate targets, and strategies to handle any climate-related risks. Non-compliance could lead to significant penalties.

While the government is soliciting feedback on these rules until July 21, 2023, it’s clear they’re set to become a permanent fixture. By the next financial year, many businesses will be required to adhere to these rules, and there will be no option to opt out. It’s crucial for businesses to start preparing now to be ready when the final version of the rules is officially enacted.

This is a summary article from Edge2020 – read the original article.

The team Edge Utilities are passionate about renewables and sustainability, we are energy brokers with an eye on the planet. We are committed to helping councils and business communities reach their net zero goals through renewable power purchasing agreements (PPAs) and smart portfolio management.
To discuss options and plans for your community contact us at save@edgeutilities.com.au  or call us on 1800 334 336 to discuss. 

South West Renewable Energy Zone: A Step Towards a Greener Future in New South Wales

Street lights on road at night

The NSW government recently released their draft declaration for the South West Renewable Energy Zone (SW REZ) access scheme to the public as part of the NSW government’s Electricity Infrastructure Roadmap.

The government is paying particular attention to the number of projects that will be granted transmission in the zone looking to generate investment.

REZs are designed to coordinate the connection of new renewable energy projects to the electricity grid within a specific area. The NSW government hopes these zones will attract investment for renewable energy projects, thereby reducing greenhouse gas emissions and providing clean, sustainable energy.

The South West REZ is anticipated to have a transfer capacity of 2.5 gigawatts (GW) and will connect to the existing electricity network via the Dinawan Substation. Due to its location, this zone will primarily focus on solar and wind energy projects, as offshore wind and extensive hydrogen investment opportunities are not as viable.

Several upgrades to the electricity network are planned to support these new projects, including the Project Energy Connect (PEC) interconnector, the HumeLink, and the proposed Victoria-NSW interconnector (VNI West). These enhancements aim to entice investors to fund renewable energy projects in the South West REZ.

To participate in this REZ, companies must meet specific requirements and adhere to the government’s guidelines. They need to demonstrate project feasibility, compliance with certain standards, and the ability to manage potential disruptions to the electricity system. Upon meeting these criteria, they will be granted access to the REZ and the benefits it offers, such as a stable and well-funded electricity network.

Public consultation for the South West Renewable Energy Zone (SW REZ) access scheme will conclude on May 15th, marking another step towards a greener future in New South Wales.

This is a summary article from Edge2020 – read the original article.

The team Edge Utilities are passionate about renewables and sustainability, we are energy brokers with an eye on the planet. We are committed to helping councils and business communities reach their net zero goals through renewable power purchasing agreements (PPAs) and smart portfolio management.
To discuss options and plans for your community contact us at save@edgeutilities.com.au  or call us on 1800 334 336 to discuss. 

The state of the market – rising energy costs in today’s budget explained.

Up and up

The budget handed down last night by the Albanese government really did show that there will be “hard days to come”. The treasurer, although acknowledging the international pressures and increases of electricity prices, did nothing to assist with this increasing cost on households and businesses bottom lines.

So why are international pressures a driver for the electricity we use when we turn on our lights?

Well let’s start with a breakdown of what goes into our bill, a large customer will see this split into each section, but smaller businesses and households don’t, they are just rolled into a flat tariff.

There are 4 main components of the energy we buy:

  1. The physical electrons / energy we purchase
  2. The environmental subsidies we all contribute into for a certain number of renewables to be underpinned
  3. The cost of running our electricity grid
  4. The cost of maintaining and running the infrastructure from the huge transmission lines coming across the state to the smaller distribution lines which bring the power to our business or home

The cost of the physical power we use has been on a rollercoaster the last few years. From unprecedented lows during the pandemic, when there was little global demand for our exports and lower demand from our domestic industry to the highs we are now experiencing. But to breakdown this huge shift we have to look abroad.

Let’s first address why we are looking outside of Australia. As a country our coal and gas is largely exported into Southern Asia. Their thirst for energy has increased dramatically over the last few decades and our abundance of natural resources and location made us a great partner to feed their demand. But we are not the only ones satisfying their thirst for energy, and therefore our price of export at is linked to the price other global countries will export at. Setting the ’Global price’. It is just like us going into Coles (China) and seeing Tim Tams for $20 and knowing they are $4 in Woollies (Australia), we would always shop at Woollies. Therefore, to ensure no company misses out the price is always about the same no matter where you shop.

So, if you are an exporter of coal and you know you can sell your Tim Tams to Coles for $20, why would you supply our domestic market (Woollies) at $4/pack. You wouldn’t, you would pile all the coal (Tim Tams) you could on a ship and send it away as quick as you can, and that is why we are linked to the international market. As we need the Tim Tams (or Coal) to ensure our domestic electricity demand is met. But, to do this, we also have to pay the $20/packet to make sure we can have enough here in Australia.

This international price has skyrocketed recently. Not only has demand come back from all the lockdowns caused by COVID19, but the Ukraine crisis has thrown global energy into a tailspin. Europe, who used to be nicely fed their Oil and Gas from Russia now cannot get their supply, as such they are telling everyone they will buy the Tim Tams for $25 even $30 per packet. So again, the circle of, if I can sell to them for $30 why would I sell to Woollies for the now $20 price re starts until Woollies (Australia) is now paying $30 per packet.

But as the cost of the Tim Tams go up we start thinking maybe I will have a Kingston (Gas) instead, it is easier to buy and no one has bought them all for the next 18 months at $30/pack. So, as we all start leaving behind the expensive Coal (Tim Tams) because they have all being bought and pre-ordered for 18 months and move to Gas (Kingston’s). In doing this, that price also increases, and so the spiral re-starts.

Now let’s add some spice. The delivery truck bringing those Tim Tams and Kingston’s to the shops (Power Stations) are flooded in, or the truck unloads but they all get soggy in the rain. Now they can’t be eaten (burned to make electricity). So, what happens? What was already a high price, gets higher. So, with a third La Nina forecast for Australia and flooding already affecting many regions, these deliveries are either delayed or just don’t make it. Meaning an already tight market becomes more sparce and therefore more expensive.

Now the cynical among us would say that the generators are taking advantage of this, and the market is pushing the price higher and higher because they have bought their Kingston’s and Tim Tams at $20/packet and could sell them to us at that price, but instead they know they could now charge $30 per packet so why not, they bank the $10 per packet and no one is wiser. But that is for the ACCC, and you would hope they are watching such behaviour with eagle eyes!

These are a handful of the drivers affecting our price at the moment, there are currently 7 to 10 of them all similar in their affect, that any fluctuation anywhere in the world is having huge repercussions to us at home.

But they aren’t the only changes. With huge pushes towards renewable energy and the certificates produced by them, this market is also increasing as the number of renewables is not increasing as quickly as the amount required. Therefore, again the costs go up and this is passed onto the end users in their bills. Now factor in this renewable energy is going to cost more not just now but in the future, as the cost of making the solar panels increases as the electricity price increases. Therefore, the cost of any of this de-carbonisation has just increased in price too.

But that isn’t the end of the story, finally, let’s consider the cost of bringing the power from the power station to our meter. This is a huge amount of infrastructure which is either older requiring it to be maintained or new requiring funding. Both costs are underpinned by debt. The higher the lending rate is, the higher this debt becomes and therefore the more we are charged to use their system. Further with the huge roll out in renewables this will require significant upgrades to the system as the power will be coming from less conventional areas to the load centres (think towns / cities). With the interest rates rising the cost of this debt or borrowing goes up, just like a mortgage on a house. Again, this only means one thing. An increase in pass through costs to our bills. With huge renewable ambitions and nowhere near enough funding passed down in this budget, that can only result in increases to our bills from our retailers.

Unfortunately, this means that without significant easing of many of these fundamentals, there is no relief in sight. Maybe for once the sensational headline of 35% increases in bills may turn out to hold some truth.

Edge Utilities can help:

If you feel you need to take more control of your company’s business energy spend, please reach out to discuss joining our Edge Utilities Power Portfolio (EUPP) where we use the power of bulk purchasing to help Australian businesses of all sizes save on their energy bills. Read more: https://edgeutilities.com.au/edge-utilities-power-portfolio/ or call us on: 1800 334 336 to discuss.  

 

Save money on business energy bills

Power Portfolio

Edge Utilities launch the Edge Utilities Power Portfolio to help Australian businesses save on energy costs

With energy prices at an all-time high and continuing to rise, the team at Edge Utilities are using the power of bulk purchasing to help Australian businesses of all sizes save on energy bills. We’ve developed the Edge Utilities Power Portfolio (EUPP) to give every Australian business access to the SAME savings as large energy users and shield them from rising energy prices.

Shield your business from rising energy costs:

By taking multiple energy users to market as one larger group, we can access bulk purchasing prices, saving on what you are currently paying for your energy. Joining the Edge Utilities Power Portfolio (EUPP) means you can access these savings AND have your energy portfolio managed by one of Australia’s leading energy management teams.

We do the hard work for you.

Through the EUPP you are joining a large power portfolio to which we apply portfolio optimisation analytics. You will be taking advantage of procurement strategies usually only available to really large users. We negotiate terms that you could never achieve on your own. With the right portfolio, we can even support your transition to renewable energy with minimal impact on your energy rates.

Who is Edge Utilities?

Under our parent company, Edge 2020, we have provided energy broker services for over 14 years, working with Australia’s largest energy users, including BHP, Glencore and SBS.

From the moment you join the EUPP, our energy team works for you. The sooner we start, the sooner you save. 

As a launch special, Edge Utilities is waiving the sign-up fee to join the EUPP. Even more savings for you.
For more information on the Edge Utilities Power Portfolio, visit: https://edgeutilities.com.au/edge-utilities-power-portfolio/