United NationsDepartment of Economic and Social Affairs Sustainable Development

Australia

Session Topic: Investing in energy and industrial development:
challenges and opportunities
Comments from Australia, Friday 5 May, 10:00-1:00
In Australia, our demand for stationary energy services is projected to grow by at
least 50 per cent over the per iod to 2020. To meet this challenge, it is estimated
that at least AU$37 billion in energy investments will be required by 2020 to meet
Australia?s future energy needs.
Servicing these levels of demand will require significant investment in generation
and transmission capacity, as well as the likely refurbishment of existing networks
and older plants.
How efficiently and effectively Australia meets this demand will play a key role
in determining our future prosperity, security and sustainability of energy
production and use.
Energy market reforms based on sound national governance arrangements are
important for attracting investment in energy infrastructure. Australia?s energy
market reforms have focused on delivering open and competitive markets to
reduce inefficiencies and promote appropriate investment.
Obstacles
Despite good progress in reforming our energy markets, substantial work remains.
Our challenge is to bring 17 regional electricity markets under a consistent
national framework and on de veloping a mature and transparent national gas
market. Recently announced reforms will improve price signals for energy
investors and consumers through the introduction of effective demand response
mechanisms.
A recent review of Australia?s energy policy by the International Energy Agency
noted that our energy market reforms provide useful experiences for other
countries. We welcome the opportunity to share our experiences and ongoing
challenges in implementing energy market reform.
Lessons learned
To add to Mr Birol?s comments on subsidies, our experience is that if a subsidy is
to be used, it needs to be targeted and transparent, and have a specific timeframe
for its end so that the appropriate signals are sent to the market.
As the World Bank and other commentators have noted, the energy sector is
particularly susceptible to corruption because of the significant investment
involved. Mr Birol?s figure of $17 trillion of investment shows us that there is a
significant challenge ahead of us to ensure investment happens with as little
interference as possible.
Australia recognises this challenge abd works with partner countries to provide
assistance to strengthen political governance, but ultimately all countries must
address these issues themselves to ensure the confidence of investors and donors,
particularly in the energy markets.
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