Australian Firms Put Energy Security And Prices Ahead Of Emission Goals

Australia’s energy landscape is undergoing a major transformation, with a national target to source 82% of electricity from renewables by 2030. While this ambition sets a clear direction, many Australian firms are navigating the transition by focusing on practical priorities. Faced with grid instability, price volatility and uncertainty around project delivery, firms are taking a pragmatic approach to energy investment. A recent Verdantix survey of 50 leaders responsible for energy decisions at Australian firms highlights a shift away from decarbonization as the primary driver, with operational resilience and economic sustainability prioritized instead. Verdantix analysis reveals that:

• Energy security is the key priority.
  Some 40% of Australian business leaders say that access to significantly more power at short notice will be ‘very important’ to their firm over the next five years. This is 10 percentage points higher than for US or UK firms, highlighting a particular emphasis on energy resilience for Australian businesses. With the Australian grid often more dispersed and less interconnected than those of the US or the UK, a failure in one part of the network can require local generators or firms to quickly increase power usage to maintain continuity.
  

• Energy market participation is a key emerging trend.

  Amongst survey respondents, 32% consider the ability to participate in demand response programmes to be ‘very important’. This links to a wider trend of firms seeking to engage with energy markets to treat energy as an asset, rather than viewing it as a cost-saving factor (see Verdantix Market Trends: Commercial And Industrial Energy Management). In fact, on a scale from 0 (no value at all) to 10 (huge business value, akin to opening a new revenue stream or market), most energy leaders in Australia rated grid interactivity at a 7 or higher.

• Net zero is taking a back seat.
  Australian leaders are significantly less likely than their US or UK peers to have achieved zero emission operations or to view zero emissions as a very important investment priority over the next five years. Though Australian firms are actively investing in renewable energy, net zero goals do not seem to be the primary motivation behind these investments. Instead, their decisions appear to be driven more by the other two pillars of the energy trilemma: energy security and cost.

To learn more about organization priorities and preferences in the Australian energy transition, read Verdantix Market Insight: Australian Energy Transition In Focus.