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The need to address the disproportionately high cost and access to energy in northern Australia for households and businesses. This brief is a key enabler of the development of the Hydrogen Hub.

Content accurate as of July 2020.

Townsville, North Queensland has suffered a prolonged period of high unemployment. The region's prolonged poor economic conditions are exacerbated by high business and household costs. Of these, access to world-competitive sustainable and priced energy is a constraint, if not the major economic constraint, for the region.

Across northern Queensland, inefficiencies in the electricity network drive the case for increased power generation. Currently, Queensland generation assets are more highly concentrated than other mainland National Electricity Market regions and located in the south-east and central regions of the state. The Queensland Government owns or controls the dispatch of nearly two-thirds of the electricity generation capacity and nearly all of Queensland’s network infrastructure/companies. Queensland’s network (and distribution) costs have primarily been responsible for the increase in electricity costs over recent decades, contributing 83% of the growth in the real cost of electricity. Due to the increased cost of supplying electricity in regional Queensland, the Queensland Government provides a subsidy to retail customers through the Community Service Obligation Payment. For 2019-20, that payment was budgeted at $500 million.

North Queensland’s electricity prices are having an adverse effect on industry and the local economy. Base electricity prices, exclusive of network and environmental charges, more than doubled between 2015 and 2018. The 2018 ACCC Inquiry into Retail Electricity Pricing showed that retail consumers have faced a real increase of 35% in their bills and a price increase of around 56% in real terms over the period of 2007/08 to 2017/18.

The current uncertainties over pricing and secure access to energy markets is negatively impacting the national and international competitiveness of North Queensland industry, the region’s capacity to attract investment, including from renewable energy projects and the economy’s ability to generate sustainable employment.

The ACCC Inquiry into Retail Electricity Pricing also showed that the investment case and ability to source funding for many new generation projects can be heavily reliant on having customer commitments for offtake for up to 10 – 15 years and that many businesses can only commit to a shorter term of contract, meaning these projects don’t get off the ground. The Report went further to say that it is likely more projects would be undertaken, if government support was provided for the ‘back end’ of suitable projects.

A key Townsville City Deal commitment is to manage energy costs and boost energy productivity. This is to be achieved by developing and implementing a tailored energy program across the city to reduce energy consumption. Townsville City Council has produced the draft Townsville Energy Strategy.

Energy Vision - To make energy work for Townsville by reducing costs, securing & diversifying supply, responding to change & building resilience

Renewable Energy Targets
Current Policy

The Queensland Government is committed to achieving a target of 50 per cent renewable energy by 2030 to reduce emissions and act on climate change, create new jobs and diversify the state’s economy.

The Powering North Queensland Plan is looking to strengthen and diversity North Queensland’s energy supply.

Proposed Policy

Underwrite offtake and transmission feed in requirements for renewable energy related projects in North Queensland.

The Mayor of Townsville wrote to the Hon Dr Anthony Lyneham MP – Minister for Natural Resources, Mines and Energy regarding a range of critical emerging clean energy projects which need support on 7 June 2019. These projects included the integrated energy solution for Lansdown Industrial Precinct and a North Queensland Green Hydrogen Hub.

Responsibility
  • Queensland Government
  • Australian Government
Energy Concessions
Current Policy

A $200 concession for electricity bills was applied following the COVID-19 pandemic, but this was a once off.

Proposed Policy

Household and small business energy concessions.

Responsibility
  • Queensland Government
Smart Energy Use
Current Policy

The Queensland Government has a range of initiatives under the Affordable Energy Plan which help residential and business customers save money on electricity.

Proposed Policy

Creation of business and household incentive packages tailored to encourage smart energy use.

Responsibility
  • Queensland Government

Boost local economic activity through increased discretionary spending resulting from reduced business and household costs.

Ability to produce local or embedded energy generation locally to support new sustainable industries such as hydrogen.

Policy

Policies that lower costs will go towards assisting sectors and households to recover, including:

  • Taxation/revenue
  • Hydrogen Hub
  • Insurance
  • Jobs and industrial relations
Programs

Support for the following projects and programs:

  • Sun Metal’s Integrated Industrial Energy Resource Program
Projects

Support for the following projects and programs:

  • NQT-1084 – The Lansdown Eco Industrial Precinct Integrated Energy Project (Majors Creek Solar)
  • NQT-1067 – Waste to Energy