NEW REPORT OUT NOW
17/11/2023
It’s always good to be back on Whadjuk Nyoongar land.
I pay my respects to their elders and thank them for their stewardship of these lands over millennia.
I’m here for two reasons.
Firstly, Premier Cook rang me and asked me to come and speak this morning.
And when Roger asks for something, I try my best to accommodate him, as a friend and as Premier of this great state.
And secondly, because I don’t need to be asked twice to talk about the importance of the opportunities of the clean energy transition for Western Australia,
It’s a delight to share the program today with both Roger and Bill Johnston.
This massive economic and environmental transition that we are jointly managing means that state, federal and local governments need to be hand in glove, working closely together.
And certainly the Albanese and Cook governments fit that bill, and I’ll talk a little bit today about some of the ways our policies and approaches are so complementary.
And of course it’s a pleasure to be also sharing the stage with my friend and colleague Madeleine King.
It’s important that Western Australia has a strong and clear voice in the Federal Cabinet, and you have that in spades in Madeleine.
In so many ways, Western Australia is a vital partner in our national effort to turn Australia into a renewable energy superpower.
It’s vital in our ambitions to export renewable energy and also to export more of the things that make renewable energy.
It’s also an integral part of our pathway to decarbonising our domestic economy.
First, let me talk about Western Australia’s role in Australia’s ambitions to help power the world in a decarbonised economy.
Of course, our reducing our domestic emissions is very important.
But we can have an even bigger impact by helping the rest of the world decarbonise, with our abundant renewable energy resources and our vital inputs to the renewable energy supply chain.
There’s a giveaway in the name: critical minerals are called critical because our transition won’t occur without them.
EVs and battery storage have already displaced consumer electronics to become the largest consumer of lithium and are set to take over from stainless steel as the largest end user of nickel by 2040.
We want not only to supply critical minerals –
But also to add as much value as possible, including by manufacturing vital parts of the renewable energy supply chain.
It’s not just about critical minerals, as important as they are.
The fact is our energy transformation needs steel and a lot more of it.
90 per cent of the total material requirements of a wind turbine are steel and cement.
And cumulative steel demand for the energy transformation between 2022 and 2050 will be almost five billion tonnes, accounting for 75 per cent of the total material requirement.
That steel will, increasingly, be green steel.
Now this isn’t without its challenges –
For example, the requirements for green steel will require innovation and new ways of processing our iron ore to be suitable for electric arc furnaces.
And work is already underway –
At Rio Tinto, working on options to upgrade Pilbara ores to be better suited to low-carbon steel making technologies.
At Fortescue’s Iron Bridge project – with high-grade magnetite having the potential to help reduce emissions in global steelmaking.
So, between critical minerals and green metals, it’s impossible to conceive of the development of our renewable export potential without this state being at the forefront.
And our Government is all in.
A few weeks ago the Prime Minister and Madeleine announced more support to de-risk investment in the critical minerals sector, including an additional $2 billion of investment in the Critical Minerals Facility.
And with the skills, local economy, supportive government – State and Federal – WA is at the heart of our clean energy transformation.
And of course, Western Australia is also an integral part of our domestic renewable energy journey.
I’ll be very frank with you.
There are challenges.
The heavy historical reliance on fossil fuels in the powerhouse of the Pilbara, for example, means we have plenty of work to do.
But this makes governments and industry working together more important, not less important.
In August, the Prime Minister, Premier, Minister Johnston and I announced a $3 billion Rewiring the Nation investment in financing priority projects across the state.
That’s no small amount of money, but we will need all of it.
Our plans have a particular focus on the Pilbara.
And the investment in the transmission in the Pilbara only makes sense because of the Cook Government’s work with industry on common user agreements –
So that the benefit of investments in transmission will shared across the Pilbara economy.
I congratulate Bill Johnston and the companies involved in striking that agreement.
Because there is no transition without transmission.
Transmission enables a lower carbon, lower cost grid.
The Pilbara is the focus, but not exclusively so.
Our investment delivers concessional loans and equity investments to new builds and major upgrades to transmission in the South West Interconnected System (SWIS) and the North West Interconnected System (NWIS) –
Helping to keep the lights on by creating a more resilient energy grid, and unlocking cleaner, cheaper energy in WA.
Also supporting around 1,800 construction jobs and unlocking future projects across WA, helping to empower regional communities.
Initial modelling suggests that in 20 years’ time, the SWIS grid will need to have up to five times more electricity than is available today as new industrial users connect to the grid.
This investment will ensure the SWIS remains fit-for-purpose and ensure cleaner, affordable and more reliable energy for West Australians – and growing WA industry, into the future.
Likewise, the funding will support more renewable energy in the NWIS, while ensuring existing infrastructure upgrades are coordinated between industries and governments.
Our Federal investment is complemented by state investments.
And I congratulate Roger and Bill on the announcements they are making today:
More investment in the SWIS –
Funding for large-scale green energy projects to WA’s Strategic Industrial Areas –
Investment in local clean energy manufacturing projects, and –
Funding for the Sectoral Emissions Reduction Strategies to drive initiatives like community batteries and EV charging infrastructure.
All these initiatives will work hand in glove with similar Federal policies.
I’m also pleased to announce today another initiative to support renewable uptake in the state –
With a joint Albanese/ Cook Government partnership to deliver cheaper, cleaner solar for up to 2000 regional and remote households in Western Australia.
This is a $19.9 million partnership towards the WA Government’s Kimberley Communities Solar Saver program –
Delivering cheaper, cleaner solar for up to 2000 regional and remote households in Western Australia.
Rooftop solar will be installed in five remote communities, distributing the benefits of renewables across the community and reducing reliance on expensive diesel generators.
The funding will help First Nations communities in the Kimberley region, including Beagle Bay, Djarindjin-Lombadina, Ardyaloon, Bidyadanga and Warmun, and tenants and low-income households in regional West Australian towns.
Of course, we know that First Nations communities are among the most energy insecure in the world.
Investing in renewable energy in these communities helps to bolster energy security and deliver energy savings.
With estimated savings under the program to be around $450 a year on their power bills.
The partnership, which includes $12.6 million from the WA Government and $7.3 million from the Commonwealth, will also provide a funding boost to the Sunshine Saver Program, helping a further 1,600 regional households access cheaper, cleaner energy from centralised solar farms.
It's a practical announcement to ensure that no one is locked out on the benefits of cheap, clean solar energy.
Renters and low-income families will be able to save around $250 a year from the Sunshine Saver Program –
On top of savings of up to $350 for those eligible for Energy Price Relief Rebates.
Now, I want to say a little about the role of gas in our renewable transformation.
And that role is important.
We are committed to ensuring a reliable energy system.
And honouring our long-term contracts with key trading partners, continuing to be a trusted and reliable energy supplier.
Yes, our role as an energy supplier will transform as we realise our vision of becoming a renewable energy superpower, including in green hydrogen.
But we won’t be jeopardising our strong international energy partnerships, we won’t be creating sovereign risk.
It’s the same big traditional energy users around the world who are investing in the burgeoning hydrogen industry and renewable transformation.
We are and always have been a reliable energy supplier – and that is what we will remain, even as that energy mix diversifies to meet global decarbonisation demands.
Domestically, the government has a target of 82 per cent renewable energy in our energy mix by 2030.
As big and ambitious as this lift is, it will leave 18 per cent of our electricity mix as non-renewable.
And as aging coal-fired power stations leave the grid, that 18 per cent will increasingly be focused on gas.
Gas is a flexible fuel necessary for peaking and firming as we undertake this transformation.
Unlike coal fired power stations (or, for that matter, nuclear power stations), gas fired power stations can be turned on and off at very short notice, making them vital for peaking and firming.
This is before we get to the needs of industrial manufacturers for gas as feedstock and direct energy.
Electrification will ramp up –
Renewable adoption will grow –
Green hydrogen will become available commercially – something I’ll speak more about in a minute.
But there will still be a need for gas as a supporting fuel and feedstock for industrial and commercial users as these developments continue to emerge.
And as the Bass Strait gas field depletes, new sources are going to be required to underpin reliability and security.
In recognition of this, it’s no surprise that the government has prioritised constructive engagement and reform on both gas pricing, and gas supply.
While it doesn’t apply to the west, after years of forecast short term shortfalls in the east coast market, we’ve delivered a gas code of conduct that means more gas at reasonable prices for Australian users.
The code imposes mandatory processes for the negotiation of gas contracts to level the negotiating playing field between producers and users.
The code also imposes a price anchor of $12, to ensure Australia domestic gas prices are driven by Australian market fundamentals, not the ructions of international gas markets.
The code supports investment certainty to deliver the additional supply we need to ensure Australian users have access to the gas they need, while ensuring Australia meets its supply commitments to our trading partners.
Of course our work on the code is important but it is no silver bullet, especially for the challenges we face in the west.
No doubt Minister King will have more to say about the Future Gas Strategy, but this important work is all about ensuring an appropriate role and supply of gas as we undertake the renewable transformation.
But as I’ve said, becoming a renewable energy superpower will see new opportunities and it will build new industries.
Renewable hydrogen is a game changer for green manufacturing. It opens the door to green metals, green fertiliser, and green chemicals – products the world increasingly needs through the net zero transformation.
Industry knows how strong our fundamentals are:
Australia has one of the world’s largest pipelines of announced hydrogen projects valued at $200-$300 billion.
By 2050, Australia’s hydrogen industry could generate $50 billion in additional GDP and create over 16,000 jobs, as well as an additional 13,000 jobs from the construction of renewable energy infrastructure to power the production of green hydrogen.
And we want WA to be a big part of this picture.
And today I’m pleased to announce the next steps in the important Kwinana Hydrogen Hub, that is being supported with $70 million in funding from the Albanese Government.
We’re announcing today that the project is now progressing to Front-End Engineering Design, bringing us one major step forward for the future of WA’s hydrogen industry.
The H2Kwinana Hydrogen Hub is being led by bp and will create 150 jobs.
It will include a 100 MW electrolyser, with the potential to expand to a total of 1.5 GW production.
Site works for H2Kwinana are already underway, with construction expected to be complete in mid-2027.
When operational, it could produce over 14,000 tonnes of green hydrogen per annum for industrial use and heavy transport.
This is equivalent to fuelling around 750 vehicles a year in Australia’s heavy vehicle fleet.
Kwinana has been an industrial and economic powerhouse for decades, making it an ideal location for a hydrogen hub that can support decarbonisation of heavy industry and connect our renewable resources to the world.
These projects are the next step towards using locally produced renewable hydrogen in Australia to reduce our industrial emissions and develop a renewable export future.
And of course, the $2 billion Hydrogen Headstart program – a down payment on ensuring Australians are part of the global race to decarbonise is a big deal when it comes to our hydrogen future.
Applications for the initial Expression of Interest stage closed last week, and I look forward to providing future updates.
So, friends, there is a sizeable task ahead of us:
The potential for Western Australia in the world’s renewable transformation is enormous.
But its potential that we have to harness.
Harness with commitment, harness with passion and harness with good and consistent policy.
That’s exactly what we intend to do.
In partnership with the Cook Government.
In partnership with Western Australian industry.
In partnership with all West Australians. Let’s get on with it.