**Check against delivery
Ladies and gentlemen, last year I had the pleasure of launching Powering Australia: Volume 3, Solutions for a Sustainable Future.
Many of the issues raised in that publication continue to challenge us today.
Tonight I am here to launch Powering Australia: Volume 4 and the theme of this year's publication - "Securing Australia's Energy Future" - could not be more timely.
This issue is top of mind for me as Minister for Resources and Energy, and also for the Government more broadly.
More and more Australians face cost of living pressures.
And the strength of our economy demands a power supply that is both reliable and -increasingly - sustainable.
Reliable, Sustainable and Accessible – these are the touchstones of a future energy supply that protects Australia's prosperity and quality of life.
In this fourth volume, Keith Orchison and John Arlidge have again provided a catalyst for the kind of robust dialogue between industry and policymakers that is critical to ensuring Australia's future energy security.
Challenges
In each chapter of Powering Australia, and in the commentary from each key industry figure, we see a pattern of common challenges emerging.
Increases in the cost of electricity and increases in demand for electricity (in particular peak demand) are the headline issues.
These challenges are driven largely by lifestyle changes.
We demand flat screen TVs, multiple computers, dishwashers and modern creature comforts including air conditioners.
Air conditioners, in particular, may provide significant comfort in Australia's warm summer, but in doing so use significant electricity.
At the same time as technology has been revolutionising our lifestyle - and driving up our energy consumption over the past decades - the infrastructure that delivers that energy needs to keep pace.
This means investment is required to meet growing demand and to replace ageing infrastructure.
And all these challenges compete with the need to reduce greenhouse gas emissions.
This will require deploying more renewable and clean energy technologies.
And is not without its own challenges.
We need to make the breakthroughs to effectively harness Australia's vast renewable energy resources and drive down the cost of these technologies to increase their deployment.
In addressing the challenges our energy sector confronts, the clear message from industry is the need for Government and policy makers to get the policy setting right – a message accompanied by a warning about the consequences of getting it wrong.
I can say with confidence that this is a message we have received loud and clear.
We understand that industry needs policy certainty to deliver the investment required to underpin our energy future.
The Government's Multi-Party Committee on Climate and Change and two associated Government roundtables are important mechanisms for achieving these goals.
Resolving the question of a price on carbon will give industry the certainty it needs to get on with investment – much-needed investment – to ensure demand continues to be met reliably.
Keith and John examine in detail some of the emerging renewable technologies that are destined to play a role in our future energy mix, as well as the role gas will play as a transition fuel.
Increased role for gas
The profile of Origin's gas-fired power station at Darling Downs epitomises the role that gas can play in the medium term.
The Darling Downs plant uses about three per cent of the water used by a conventional coal-fired power station and emits less than half the emissions of the most efficient coal-fired generators.
This is a central transition technology – both at home and for our trading partners.
The gas that fires the plant comes from Australia's growing coal seam gas sector.
We have seen the birth and rapid development of this sector, and we are now seeing this evolve into an LNG industry, particularly in Queensland.
We recently saw the announcement of BG Group's Final Investment Decision on their US$15 billion coal seam gas LNG development.
Projects like these are important as Australia continues to grow as a major LNG exporter.
The benefits in terms of reduced global emissions are clear.
For every tonne of greenhouse gases emitted in Australia during LNG production, at least four tonnes of global emissions are avoided.
This is even greater in China where the emissions avoided range between 5.5 tonnes and 9.5 tonnes.
A strong LNG export industry is good news not just for Australia but also for our trading partners.
International context
Looking at China's fossil fuel consumption only serves to underline the importance of this LNG export industry as part of the global effort that is required to reduce greenhouse gas emissions.
In 2009 China consumed three billion tonnes of black coal.
To put this in perspective, despite being the largest coal exporter in the world, Australia's total coal exports– to all countries – were only 292 million tonnes.
That's less than 10 per cent of all the coal consumed by China in 2009/10.
And Australia's domestic consumption pales by contrast.
Australia consumed 131 million tonnes of both black and brown coal – that is just four per cent of the total black coal consumed by China.
China consumed 23 times as much black coal as Australia's total coal consumption.
China's energy demand has doubled in the last decade alone.
And there is no sign of this levelling out.
In the next decade, around 1,000 new Chinese coal-fired power stations will be brought online.
I have previously referred to the statistics below, but they really provide an illustration of the scale of growth we are talking about.
Australia today has five cities with more than one million people.
Europe has 35.
By 2030 China will have more than 220.
This really puts the energy and emissions challenge in context.
Electricity prices
When comparing electricity generation across countries it is important to keep our individual challenges in mind.
Powering Australia points out that the length of the network per electricity customer in Australia is four times that of Britain.
Hence, network costs will be a factor in Australia more so than elsewhere.
Increasing electricity costs – including rises of over 40 per cent for residential prices over the last three years – is the current reality facing Australian households.
This increase is predominantly attributable to significant investment in network assets.
I note the comments from Keith yesterday saying that “two-thirds of the electricity price increases now in train for NSW between 2007-08 and 2012-13 are driven by rising network costs.”
The Challenge for Australia's electricity sector
Australian economic growth has historically been tied to increases in energy use and greenhouse gas emissions.
As Paul Simshauser noted in a recent paper, the average household energy demand in New South Wales and Queensland has risen from 2 megawatt hours per annum in 1955 to 4 megawatt hours per annum in 1970, and grew further to reach approximately 8 megawatt hours per annum in 2008.
A further 20 per cent increase in total Australian electricity consumption is expected between now and 2020.
Our greenhouse gas emissions are also growing.
In 2008 Australia's greenhouse gas emissions were 576 million tonnes.
This is predicted to grow to 669 million tonnes by 2020 in a business as usual scenario.
Reducing Australia's emission by five per cent on 2000 levels by 2020 will require a cut to 525 million tonnes in 2020, a reduction of 144 million tonnes from business as usual and a reduction of 51 million tonnes from our 2008 emissions.
Looking at electricity generation, we know that Australia's generation mix is currently heavily reliant on non-renewable sources, with fossil fuels providing around 93 per cent of our electricity.
Coal alone provides 82 per cent of our electricity.
Coal fired generation delivers 181 million tonnes per annum of Australia's emissions, or 31 per cent of our greenhouse gas emissions.
Therefore, while we need new capacity to meet growing energy demand, we also need to reduce emissions from our existing fleet if we are to meet our emissions target by 2020.
This is no easy task at a time when uncertainty is clouding investment decisions, and highlights why the Government is seeking to deliver policy certainty.
Transformation in Australia's electricity sector
We need to decouple economic growth from emissions growth if we are to transition Australia to a low carbon economy.
There are two sides of the equation that need to be addressed if we are to achieve this – demand and supply.
As a wealthy community, we are driving energy demand, particularly peak energy demand.
As Powering Australia notes, areas like South East Queensland are confronted by a huge increase in the share of power supply taken up by air-conditioning.
It increased five-fold between 1992 and 2005 and continues to climb.
Similar trends are evident in Western Australia and in both these states the resources and energy sector is adding additional pressure on two fronts.
Firstly through increased demand to service their energy intensive operations and secondly through competition for skilled labour.
The issue of summer peaks and increasing base-load demand is driving the need for large-scale new plant investment.
There are no easy solutions to this challenge, but increasing energy efficiency offers an opportunity.
Through a range of programs and initiatives the Australian Government is driving energy efficiency outcomes.
While energy efficiency assists in reducing demand – this is only one half of the story.
We also need to reduce our emissions intensity on the supply side – from our electricity generation sector.
The Australian Government has introduced a number of measures to facilitate the transition to cleaner energy generation.
In addition to the 20 per cent by 2020 Renewable Energy Target, the Government has introduced the $5.1 billion Clean Energy Initiative.
Underpinning these initiatives is a recognition that it will largely be the private sector that delivers the necessary future investment in electricity generation.
This means ensuring that the investment framework within the National Electricity Market is robust and able to deliver generation capacity when and where it is needed.
Conclusion
Australia and the world face the same energy challenge to deliver both clean and secure energy supplies to meet growing demand.
This publication touches on some of the shared challenges we have ahead.
I thank Keith and John for being part of the debate, and for the opportunity to launch this publication today.