Australian gas prices soared, and wholesale electricity costs reached their highest levels on record. In response, the federal government introduced gas and coal price caps in December it claims are working: recent Treasury analysis found forecast wholesale power prices have fallen since the plan was announced.

Energy analyst Lisa Zembrodt says these price caps will continue to shield the Australian market from international upheaval in 2023, and doesn’t believe they will slow the renewable energy transition if they only remain in place for the proposed 12 months.

“This is a smart, short-term move for the domestic economy and households, and I don’t see it slowing down the energy transformation,” says Zembrodt, the director of markets at Schneider Electric, a corporate energy advisory firm.

The accelerating momentum of the renewable transition will come into sharper focus this year, and the federal government will be expected to act on two big-ticket budget pledges: a $20 billion fund to expand and upgrade Australia’s ageing electricity grid, and $1.9 billion to help regional Australian industries harness the economic opportunities of decarbonisation.

While this renewable infrastructure – like wind and solar farms, and energy storage – won’t be built in the next year, the planning and investment decisions for these assets need to be rapidly made.

In 2022, 2.9 gigawatts of renewable energy capacity was connected to the grid, a slight rise on 2021. Australia will need to at least double this rate of new wind and solar connections over the next eight years if it is to meet the “step change” scenario outlined by the Australian Energy Market Operator (AEMO).

3. ‘No new extinctions’: is it possible?

When the full extent of Australia’s biodiversity crisis was outlined in last year’s State of the Environment report it made for disturbing, if unsurprising, reading: since 1985 our population of threatened birds, mammals and plants has, on average, halved or worse.

Environment Minister Tanya Plibersek responded by saying Australia would prevent any new native animal or plant extinctions. To make good on this ambitious promise, the government will need to properly cost the recovery actions needed for endangered species. For starters, there are about 200 overdue recovery plans – which outlines how endangered species should be protected – yet to be completed.

A 2019 study led by Professor Brendan Wintle, from the University of Melbourne, revealed Australia was spending about 7 per cent of the approximately $1.6 billion per year needed to halt species loss.

The Albanese government must also demonstrate how tough it will be on regulatory reform. Plibersek has promised to establish an environmental protection agency with powers to refuse development applications and create national environment standards.

“We’re going to watch whether they can rein in regional forest agreements [which allow states to override national environment laws] and properly resource the new enforcement agency,” says Wintle. “This will mean success or failure on this good, but ambitious, no extinctions promise.”

4. Electric cars: momentum, finally

Australia has languished far behind when it comes to the uptake of electric vehicles. They made up just 3.4 per cent of new cars sold here last year, compared to 10 per cent globally, and about 85 per cent in Norway.

Labor’s recent deal with the crossbench to exempt low and zero-emission cars from fringe benefits tax is the first financial incentive for Australian drivers to purchase EVs, and was paired with $500 million to create more charging stations.

But the real turning point this year will be the release of a long-overdue national electric vehicle strategy, expected before the May budget this year.

Advocates hope it will finally introduce fuel efficiency standards, which would discourage car companies from importing their dirtiest current vehicles to our shores, and increase the supply of EVs. Australia is the only country in the OECD not to have them.

“If we get fuel efficiency standards right this year, we’ll fundamentally transform Australia’s transport sector,” says Behyad Jafari, the head of the Electric Vehicle Council.

There is strong consumer interest in EVs, Jafari says. He gives an example of a recent online sale of two EV models – the Hyundai Ioniq 5 and Kia Ev6. Around 500 units were allocated to Australia, and those sold out online within a couple of hours, with a waiting list of 16,000 people.

“The demand is definitely there now, all that’s left to fix is supply,” he says.

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