Australian Government, 2011‑12 Budget
Budget

Part 2: Expense Measures (Continued)

Resources, Energy and Tourism

A Cleaner Future for Power Stations

Expense ($m)
2010‑11 2011‑12 2012‑13 2013‑14 2014‑15
Department of Resources, Energy and Tourism 0.5 1.8 0.8 0.9

The Government will provide $3.9 million over four years from 2010‑11 to expand the Energy Efficiency Opportunities Program to include the electricity generation sector and to allow the Department of Resources, Energy and Tourism to develop new emissions and Carbon Capture and Storage‑ready standards for all new coal‑fired power stations.

This measures includes $3.1 million for the expansion of the Energy Efficiency Opportunities Program ($0.5 million in 2010‑11, $1.0 million in 2011‑12, $0.8 million in 2012‑13 and $0.9 million in 2013‑14). The program encourages large energy‑using businesses to improve their energy efficiency by requiring them to identify, evaluate and report publicly on cost effective energy savings opportunities. Funding of $0.8 million in 2011‑12 will be provided to determine the scope and application of best practice standards for power stations.

This measure delivers on the Government's election commitment.

Australian Centre for Renewable Energy — redirection of funding

Expense ($m)
2010‑11 2011‑12 2012‑13 2013‑14 2014‑15
Department of Resources, Energy and Tourism 1.0 ‑7.3 ‑7.7 0.9 1.0

The Government will redirect $18.1 million over two years ($9.1 million per annum in 2011‑12 and 2012‑13) from program funding for the Australian Centre for Renewable Energy (ACRE) to support delivery of renewable energy programs within the Resources, Energy and Tourism portfolio. Of this amount, $6.0 million over five years from 2010‑11 will be provided to support program delivery by ACRE.

ACRE will now administer programs totalling $480.6 million over five years from 2011‑12. ACRE promotes the development, commercialisation and deployment of renewable energy technologies through a commercial investment approach.

Savings from this measure will be redirected to support other Government priorities.

Carbon Capture and Storage Flagships — reduction and deferral of funding

Expense ($m)
2010‑11 2011‑12 2012‑13 2013‑14 2014‑15
Department of Innovation, Industry, Science and Research ‑100.0
Department of Resources, Energy and Tourism ‑17.1 ‑97.1 ‑90.7 ‑116.0
Total ‑100.0 ‑17.1 ‑97.1 ‑90.7 ‑116.0

The Government will reduce funding for the Carbon Capture and Storage Flagships program. This will provide savings of $420.9 million over five years from 2010‑11 to be redirected to other priorities including the establishment of a National CO2 Infrastructure Plan. Funding of $260.0 million will be restored to the program beyond the forward estimates ($75.0 million in 2015‑16, $135.0 million in 2016‑17 and $50.0 million in 2017‑18).

The savings include a reduction of $100.0 million in 2010‑11 in funding for carbon capture and storage research infrastructure projects under the Education Investment Fund.

This measure also delivers on the Government's election commitment to redirect $75.0 million per annum in 2012‑13 and 2013‑14 from the Carbon Capture and Storage Flagships program.

The program will now provide funding of $1.6 billion, including $100.0 million under the Education Investment Fund.

Savings from this measure will be redirected to support other Government priorities.

See also the related expense measure titled National CO2 Infrastructure Plan — establishment.

Connecting Renewables — Connecting to the Grid — additional funding

Expense ($m)
2010‑11 2011‑12 2012‑13 2013‑14 2014‑15
Department of Resources, Energy and Tourism 0.5 0.5 0.5

The Government will provide $1.4 million over three years to the Department of Resources, Energy and Tourism to support the design phase of the Connecting Renewables — Connecting to the Grid program. The program provides assistance for the connection of remote renewable energy sources to the electricity network.

This measure builds on the $1.0 billion over ten years provided in the Mid‑Year Economic and Fiscal Outlook 2010‑11.

Emerging Renewables — establishment

Expense ($m)
2010‑11 2011‑12 2012‑13 2013‑14 2014‑15
Department of Resources, Energy and Tourism 0.2 0.7 0.6 0.4 0.1

The Government will provide $104.2 million over five years to support the development of emerging Australian renewable energy technology, especially in the areas of geothermal energy and ocean energy technology. The program will be administered by the Australian Centre for Renewable Energy.

Funding for the $102.2 million grant component of this measure ($15.0 million in 2011‑12, $30.0 million in 2012‑13, $40.0 million in 2013‑14 and $17.2 million in 2014‑15) has already been included in the forward estimates and will be met from within the existing resourcing of the Department of Resources, Energy and Tourism ($62.2 million) and from the funding provision for the Renewable Energy Future Fund ($40.0 million).

This measure delivers on the Government's election commitment.

Ethanol Production Grants Program — extension

Expense ($m)
2010‑11 2011‑12 2012‑13 2013‑14 2014‑15
Department of Resources, Energy and Tourism 37.7
Australian Taxation Office ‑37.7
Total

The Government will extend the Ethanol Production Grants Program until 30 November 2011 in conjunction with delaying the alternative fuel taxation arrangements. The program provides grants to Australian manufacturers of ethanol to offset the excise paid on domestically produced ethanol.

The cost of extending the program of $37.7 million in 2011‑12 will be offset by an equivalent reduction in expenses for the Australian Taxation Office. This reflects a corresponding delay in the commencement of the new arrangements. The new arrangements will be administered by the Australian Taxation Office from 1 December 2011.

See also the related revenue measure titled Alternative fuels — delayed introduction of taxation and other changes in the Treasury portfolio.

Global Carbon Capture and Storage Institute — reduction in funding

Expense ($m)
2010‑11 2011‑12 2012‑13 2013‑14 2014‑15
Department of Resources, Energy and Tourism ‑15.0 ‑30.0

The Government will reduce funding for the Global Carbon Capture and Storage Institute. This will provide savings of $45.0 million over two years from 2011‑12.

Savings from this measure will be redirected to support other Government priorities.

This measure delivers on the Government's election commitment.

Montara Commission of Inquiry — implementation of the Government response

Expense ($m)
2010‑11 2011‑12 2012‑13 2013‑14 2014‑15
Department of Resources, Energy and Tourism 2.1 2.9 1.9 1.4

The Government will provide $8.4 million over four years to implement its response to the Report of the Montara Commission of Inquiry of 18 June 2010. The funding will support additional actions to improve the regulation of the offshore petroleum (oil and gas) industry, including the development of a wells compliance and monitoring framework and the assessment of Commonwealth legislation applicable to the Montara oil spill.

This measure also delivers on the Goverment's election commitment to host an international conference in Australia of legislators, regulators and industry to learn from both the Montara and Gulf of Mexico incidents.

National CO2 Infrastructure Plan — establishment

Expense ($m)
2010‑11 2011‑12 2012‑13 2013‑14 2014‑15
Department of Resources, Energy and Tourism 17.1 22.1 15.7 6.0

The Government will provide $60.9 million over four years to support the establishment of a National CO2 Infrastructure Plan. The plan includes four main elements:

  • a multi‑basin CO2 storage exploration and appraisal program to facilitate long‑term CO2 storage hubs;
  • acquisition of significant pre‑competitive offshore and onshore CO2 storage data in basins in New South Wales, Victoria and Western Australia;
  • a National CO2 Drilling Rig Deployment Strategy; and
  • a National CO2 storage and Transport Infrastructure Assessment.

The plan forms part of the Government's Clean Energy Initiative, announced in the 2009‑10 Budget.

Funding for the measure will be redirected from the Carbon Capture and Storage Flagships program.

See also the related savings measure titled Carbon Capture and Storage Flagships — reduction and deferral of funding.

National Low Emissions Coal Initiative — reduction in funding

Expense ($m)
2010‑11 2011‑12 2012‑13 2013‑14 2014‑15
Department of Resources, Energy and Tourism ‑2.5 ‑3.6 ‑2.3 ‑2.4 ‑2.1

The Government will reduce funding for the National Low Emissions Coal Initiative. This will provide savings of $12.8 million over five years.

The National Low Emissions Coal Initiative supports the development and deployment of technologies to reduce emissions from coal use. The program will now provide funding of $149.7 million over four years from 2011‑12.

Savings from this measure will be redirected to support other Government priorities.

Natural Disaster Recovery and Rebuilding — redirection of Solar Flagships funding

Expense ($m)
2010‑11 2011‑12 2012‑13 2013‑14 2014‑15
Department of Resources, Energy and Tourism ‑75.0 ‑50.0 100.0 ‑125.0

The Government will redirect $150.0 million from the Solar Flagships program over the forward estimates period to the Natural Disaster Recovery and Rebuilding package of measures. Total program funding will remain unchanged, with $150.0 million to be restored beyond the forward estimates to better match the expected spending profile of the program.

Savings from this measure will be used to meet the costs of supporting individuals, businesses and local communities affected by natural disasters in 2010‑11 to recover and rebuild.

Natural Disaster Recovery and Rebuilding — reduction and deferral of funding for the Carbon Capture and Storage Flagships program

Expense ($m)
2010‑11 2011‑12 2012‑13 2013‑14 2014‑15
Department of Resources, Energy and Tourism ‑109.6 ‑18.2 ‑122.2

The Government will redirect funding from the Carbon Capture and Storage (CCS) Flagships program over the forward estimates period to assist with the rebuilding of flood‑affected regions across Australia. Funding for the program will be reduced by a total of $250.0 million across the forward estimates period, with $160.0 million of this amount to be re‑phased to beyond the forward estimates.

Savings from this measure will be used to meet the costs of supporting individuals, businesses and local communities affected by natural disasters in 2010‑11 to recover and rebuild.

Further information can be found in the press release of 27 January 2011 issued by the Prime Minister.

Natural Disaster Recovery and Rebuilding — reduction and deferral of funding for the Global Carbon Capture and Storage Institute

Expense ($m)
2010‑11 2011‑12 2012‑13 2013‑14 2014‑15
Department of Resources, Energy and Tourism ‑60.0 ‑35.0 20.0 20.0

The Government will redirect funding from the Global Carbon Capture and Storage Institute over the forward estimates period to assist with the rebuilding of flood affected regions across Australia. Funding for the Institute will be reduced by a total of $55.0 million over the forward estimates, with $5.0 million of this amount to be re‑phased beyond the forward estimates.

Savings from this measure will be used to meet the costs of supporting individuals, businesses and local communities affected by natural disasters in 2010‑11 to recover and rebuild.

Further information can be found in the press release of 27 January 2011 issued by the Prime Minister.

Renewable Energy Venture Capital Fund — establishment

Expense ($m)
2010‑11 2011‑12 2012‑13 2013‑14 2014‑15
Department of Resources, Energy and Tourism 0.9 ‑46.0 ‑24.2 16.6 16.5

The Government will provide $108.7 million over 14 years to support the development and commercialisation of renewable energy technologies by making early‑stage equity investments that leverage private funds.

Of this amount, $8.7 million (including $4.9 million beyond the forward estimates) will be provided to support delivery of the program by the Australian Centre for Renewable Energy. The $100.0 million grant component of this measure ($13.0 million in 2011‑12, $15.0 million in 2012‑13, $16.0 million per annum in 2013‑14 and 2014‑15, and $40.0 million beyond the forward estimates)will be met from the existing funding provision for the Renewable Energy Future Fund ($60.0 million in 2011‑12 and $40.0 million in 2012‑13).

This measure delivers on the Government's election commitment.

Solar Flagships — redirection of funding

Expense ($m)
2010‑11 2011‑12 2012‑13 2013‑14 2014‑15
Department of Resources, Energy and Tourism ‑50.0 ‑170.0

The Government will reduce funding for the Solar Flagships program by $220.0 million over two years from 2012‑13. Funding for the program will be restored beyond the forward estimates ($110.0 million per annum in 2015‑16 and 2016‑17).

Savings from this measure will be redirected to support other Government priorities.

This measure delivers on the Government's election commitment.

United States — Australia Solar Research Collaboration initiative — establishment

Expense ($m)
2010‑11 2011‑12 2012‑13 2013‑14 2014‑15
Department of Resources, Energy and Tourism

The Government will provide $50.0 million over four years to support joint projects with the United States designed to reduce the cost of solar energy technologies. The funding will support new research on advanced solar technology projects, and exchange programs and research scholarships focussed on affordable solar energy solutions. The initiative will build on existing collaboration between researchers in the two countries. The Australian Solar Institute will manage the Government's contribution to the initiative.

The cost of this measure will be met from the existing funding provision for the Renewable Energy Future Fund.

The initiative was jointly announced by the Prime Minister and the Secretary of State of the United States. Further information can be found in the press release of 7 November 2010 issued by the Prime Minister.

Upstream Petroleum Regulatory Reform — revised arrangements

Expense ($m)
2010‑11 2011‑12 2012‑13 2013‑14 2014‑15
Department of Resources, Energy and Tourism ‑8.2 ..
Related revenue ($m)
Department of Resources, Energy and Tourism ‑12.5 8.9 15.3
Related capital ($m)
Department of Resources, Energy and Tourism 7.4 5.0

The Government will adopt a revised model for the regulation of the upstream petroleum sector in Commonwealth waters following extensive consultation with state governments, the Northern Territory Government and industry, and consideration of the outcomes of the Montara Commission of Inquiry.

The Government will provide $20.9 million over two years (including $12.3 million in capital funding) for the establishment of the National Offshore Petroleum Safety and Environmental Management Authority and the National Offshore Petroleum Titles Administrator. This represents a net increase in establishment costs of $4.1 million from the funding previously provided for the establishment of a new regulator.

The National Offshore Petroleum Safety and Environmental Management Authority will be responsible for regulation, in Commonwealth waters, of well integrity, environment plans and day‑to‑day operations, and will take over occupational health and safety regulation from the National Offshore Petroleum Safety Authority. The National Offshore Petroleum Titles Administrator will be established as a statutory office in the Department of Resources, Energy and Tourism to advise on title decisions, and administer titles and data in Commonwealth waters. Both entities will operate on a full cost recovery basis from 1 January 2012.

Registration fees payable by industry under the Offshore Petroleum and Greenhouse Gas Storage (Registration Fees) Act 2006 will be retained by the Government, rather than passed on to the states and the Northern Territory, for a two year period from 1 July 2011 to meet the establishment costs. This will result in a net increase of $11.7 million in revenue retained over three years. Ongoing cost recovery arrangements are to be addressed later in 2011.

See also the related measure titled National Offshore Petroleum, Minerals and Greenhouse Gas Storage Regulator — establishment in the Mid‑Year Economic and Fiscal Outlook 2009‑10.

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