How Barr plans to get the ACT, and the nation, to net zero

The ACT Government is happy to wield both carrots and sticks to transition to a fossil-fuel-free Territory and drive down greenhouse emissions, but it still expects market forces to do the heavy lifting.

It’s a model Chief Minister Andrew Barr says the ACT, as a small jurisdiction, is well placed to embrace.

Mr Barr set out his government’s approach in a keynote speech to the Better Future Australia Forum in Canberra and how it will guide the development of an Integrated Energy Plan, which will be crucial to the ACT avoiding price shocks and keeping the lights on as demand for electricity grows.

He said a mix of targeted government investment and regulation with market forces would drive the ACT’s energy transition in tandem with other jurisdictions and a Federal Government committed to taking meaningful action on climate change.

Mr Barr said the ACT could show how to deliver on an ambitious climate agenda that supported economic prosperity and a strong Budget position.

This included providing strong market signals on the phasing out of fossil fuel gas and the transition to zero-emission vehicles by setting realistic deadlines that allowed much of the work to be done by business-as-usual purchases over time.

He said the government’s approach was modelled on the rollout of digital TV and the phase-out of leaded petrol.

“Most Canberrans will make this transition over the next 20 years without the need for government support, in the same way most households bought their own digital TV when it suited them,” he said.

“But for those that do need assistance, we already have great supports in place to assist households and businesses with the upfront costs of efficient electric appliances.”

Mr Barr said that by making decisions now on gas and ZEVs, by not registering new internal combustion engine vehicles by 2035 and providing incentives for ZEV purchases, the government was providing certainty to businesses and households.

He said the ACT already had the highest rate of ZEV ownership per capita in the country and the supply of ZEVs was struggling to keep pace with demand.

“Through the National Electric Vehicle Strategy set to be delivered by the Federal Government, we expect to see national and state and territory policy settings working together to increase the supply of and demand for electric vehicles,” he said.

Mr Barr stressed that complementary national, state and territory actions would be critical to achieving the nation’s climate goals, saying Australia had entered a new era of collaboration and cooperation on climate change.

“While the clear signals we are sending to households and businesses in the ACT are vital, decisive and meaningful national action is central to ensuring market forces support the right investments being made over the next two decades,” he said.

“We look forward to working with the Commonwealth as key measures like the National EV Strategy and Safeguard Mechanism take shape.”

Mr Barr said industry had been screaming out for a clear national policy direction on climate change and these key measures would complement the ACT’s policy settings to drive investment in new technological solutions and renewable energy to achieve net zero emissions.

The ACT’s Energy Plan would tackle how the Territory meets the increased demand for electricity in a cost-effective way, including storage.

“If we think of our electricity distribution system as a common household power board, we need to make sure we have enough sockets for all the increased demand that will be coming into the system,” Mr Barr.

“A failure to plan for this increased demand could lead to both price shocks and reliability issues in our electricity system.”

The Big Canberra Battery project, which will provide at least 250 MW of new ‘large-scale’ battery storage, was a critical initiative that would strengthen the stability of the energy grid, foster growth in the renewable energy sector and potentially provide a source of revenue for the Territory, Mr Barr said.

The government expects to release its Integrated Energy Plan in 2024.