AEC launches Statement of Strategic Intent

The Australian Energy Council’s members have long recognised the need to decarbonise the economy and respond to the environmental impacts of climate change.  In response to these imperatives, the electricity sector is proud to have been at the forefront of Australia’s emissions reduction efforts for over a decade.   

We know that electricity generators, as major carbon emitters, will continue to play a key role in Australia reducing its emissions.  In fact, greenhouse gas emissions in the National Electricity Market (NEM) have fallen by around 24.6 per cent since June 2009. Data from the Department of Industry, Science, Energy and Resources shows national emissions from electricity are expected to fall 55 per cent by 2030 from the 2005 baseline and by 64 per cent in the NEM.

But there is much work ahead. One of our key priorities is assisting stakeholders, and especially consumers, to understand the complexity and fragility of our electricity system as it reforms.  To assist in those efforts, today the AEC launches its Statement of Strategic Intent, a complementary expansion on our announced climate change targets. The package of information it contains is designed to enhance understanding of the challenges ahead and illustrate how the AEC and its members are meeting them as we move through the energy market transition.

The AEC announced its endorsement of an economy-wide Net Zero emissions by 2050 target for Australia in June 2020.  At that time we confirmed our support for the Paris Agreement and the need for developed countries to transition to Net Zero emissions by 2050 to help achieve the Agreement’s temperature goals.

Building on this commitment, in December 2021 AEC member CEOs agreed to support an economy-wide interim emissions reduction target. This came about due to the realisation that net zero by 2050 is only achievable if sensible interim targets are in place to assist policymakers and sectors across the economy to decarbonise.

Consequently, on 16 December 2021 the Secretariat announced support for a 55 per cent reduction on 2005 emission levels by 2035 or “55 by 35”. The target is marginally behind a straight line from 2021 emission levels to net zero in 2050, but ahead of a straight line from the current 2030 projections.

To complement the “55 by 35” announcement, the AEC commissioned a series of discussion papers to further analyse some key elements of meeting such a target.  Those papers can be found here.

The AEC’s interim target announcement helped focus public discussion on what is being done to achieve net zero in the wider economy. The call for other sectors to reduce their emissions has since been echoed by the Climate Change Authority and will continue to be an area of focus for the AEC in its discussions with stakeholders.

The AEC has always emphasised both the energy industry’s leading role in decarbonising to date, and its intention to ‘lean in’ and support other sectors of the economy which are yet to begin their emissions reduction journey.  Electrification is the obvious solution to assist those sectors begin to decarbonise and we look forward to exploring how best we can assist.

The Statement of Strategic Intent sets out clearly the AEC’s mission, focus and challenges in making the energy market transition.  The centrepiece of this statement is an interactive Dashboard which illustrates the many interrelated elements of the energy market transition.

At its core the Statement of Strategic Intent emphasises the AEC’s commitment to the energy transition and the role it intends to play in the development of policy frameworks to support reaching net zero by 2050.  In doing so we must anticipate and guard against adverse impacts on affordability, security, and sustainability for consumers.

The AEC is proud to be the voice of its members as they support consumers and help Australia move through the energy market transition.  We will promote this statement and the Dashboard as a tool to improve understanding of the complex challenges before us as a sector and, more broadly across the economy, in the shift to a lower emissions future. 

A link to the Statement of Strategic Intent and the accompanying energy market transition Dashboard is here.