Live Speech - 16th Annual NSW Major Projects Conference
The Hon. Matt Kean
Chair - Climate Change Authority
Check against delivery.
May I acknowledge the Traditional Owners of the land where I am today, the Gadigal clan of the Eora Nation, and pay my respects to elders, past and present. I recognise their enduring connection to Country and the deep knowledge and stewardship that has sustained these lands and waters for thousands of generations.
Thank you to the organisers of the Conference and all the speakers, panellists and audience members participating.
As a former NSW Treasurer who was involved in discussions and decisions on some of the projects being profiled, I understand the complexity of financing and delivering them.
They each have their own challenges, but they also have the potential to reshape the productivity and prosperity of our cities and regions.
What I want to speak about today is the prospect of doing that on a scale that Australia's former Chief Scientist, Alan Finkel, described as 'the biggest engineering challenge ever undertaken.'1
And that's decarbonising the nation's energy grid.
The concept is simple - harnessing the power of abundant natural resources already in Australia's possession.
In reality, though, it's complicated - we need to create a mammoth amount of new clean energy infrastructure and forge a reliable, affordable electricity network.
I'll discuss the why, the what, and the how - and the role that the Climate Change Authority has in identifying the best way to deliver on the mission.
Let's start with the why.
There's the obvious fact that our climate is already changing, and that will accelerate without action. Last week's spotlight report from the United Nations Environment Program highlighted this very point. It warned that global temperatures are likely to exceed 1.5°C within the next few years. Every fraction of a degree beyond that threshold brings increasing climate risks, impacts and the likelihood of crossing dangerous tipping points.
That's why we need to not just sustain - but accelerate - deployment of clean tech to reduce our emissions.
It is also why major new infrastructure projects of the kind discussed here today consider physical climate risk.
The case for making them more resilient to the increasing cycle of intense bushfires, floods, droughts and cyclones is compelling.
The decisions taken today in the design of new assets and networks lock in emissions, costs and risks for decades to come.
The second factor to consider is the changing economics of our electricity grid.
Coal-fired power is increasingly unreliable and more expensive.
It's the economics of the plants that renders them obsolete, not ideology.
That's reinforced by the fact that renewable energy is consistently found by experts like the CSIRO and Australian Energy Market Operator to be the lowest-cost option for creating new electricity generation.
This price advantage is increasingly visible. Renewable-based generation has begun to overtake the contribution of traditional fossil fuels to the grid. And relative to the same time last year, wholesale electricity prices have declined by 47% in the NEM.
Third, we need to understand the world around us.
Whilst the precise trajectory and posture of individual countries may vary, the undeniable trend among our major trading partners is in one direction.
The pursuit of decarbonisation means we can benefit at home, not just from a cleaner environment, but through the prosperity that comes from creating the low and zero emission goods and services the world is increasingly demanding.
Now let's turn our attention to the what.
Australia has three flagship emission reduction goals - net zero by 2050, 62 to 70 per cent by 2035, and 43 per cent below the 2005 baseline by 2030.
And when it comes to the two nearer term targets, transformation of the electricity grid is going to do the heavy lifting.
There are good reasons for that.
One is that thanks to the maturity and commerciality of the technology involved, decarbonising our grid is the largest source of near-term abatement potential.
The other reason is that a grid built on clean energy helps turbocharge decarbonisation across other sectors of the economy - through the switch from fossil fuels to clean electricity.
Every sector from agriculture to heavy industry to the built environment and transport will need to play its role in helping Australia achieve our emissions reduction goals.
As new and exciting technologies, fuels and energy efficiency solutions continue to emerge, flagship policies such as the Safeguard Mechanism will drive gains in harder-to-abate industries.
But right here, right now, the grid remains the main game.
Emissions in the electricity sector are already falling faster than in any other sector.[1](Opens in a new tab/window)
In 2025, this reduction in electricity emissions accounted for 48% - almost half - of the nation's total emissions reductions.[2](Opens in a new tab/window)
We're increasingly supplementing renewables-based generation with battery and storage solutions that make for a cleaner, stronger grid.
Grid-scale storage in the National Electricity Market doubled in the 12 months from March 2025.
For context, those big batteries have added 11.3 gigawatt hours of capacity to the system.
That's almost as much as the 390,000 household batteries that surged into the system over a similar timeframe.
That's the good news.
Now here's the challenge.
We still need to drive down emissions, further and faster, and we need to bring multiples of the current infrastructure pipeline online to stay on track.
Late last year, the Climate Change Authority delivered its advice to the Government on Australia's 2035 emissions reduction target.
The Authority recommended a range of 62 to 70 per cent and was pleased that the Government accepted our advice.
In doing so, the Authority chronicled the uplift required in both emissions reductions and renewable energy generation, storage and transmission infrastructure.
It requires us to more than double our annual rate of emissions reductions to make the 2035 target.
And it demands a step change in the rate of renewable energy investment.
Rooftop and distributed solar capacity has to double.
Utility-scale solar needs to triple.
Wind capacity . . . quadruple.
Utility scale storage - a six-fold increase is needed.
And that needs to be matched with an acceleration in the rate of transmission line installation.
While that's a lot, it's still not enough. There are a lot of other ingredients that go into the creation of a resilient, durable electricity grid.
Measures to underpin flexible demand, support consumers, improve energy efficiency and ensure we have dispatchable capacity when it's needed are just as crucial.
And in addition to a cleaner, stronger grid, these measures will deliver stronger household budgets.
For example, households that fully electrify by transitioning to electric vehicles, appliances, heating, and integrating solar and battery storage could cut their energy costs by hundreds to thousands of dollars a year.
Which brings me to the how.
Now, for all our desire to move with urgency and speed, we can't simply waive off risks to social license.
If we get it wrong, projects will stall as community criticisms mount and complicate the pathway to approval.
The expectations of regional communities on the frontlines of change are more than reasonable.
Communities want confidence that local workers will have pathways in new industries.
Landowners and businesses want clarity about how infrastructure will be developed and people rightly expect that the benefits of new projects will be shared fairly across the region.
Communities need to see a meaningful dividend and local businesses should have every opportunity to take part in the construction, operation and maintenance of new energy infrastructure.
In short, progress depends on people seeing value and being heard in the shift to a clean energy future.
That is why, in last year's Annual Progress Report, the Authority recommended a national approach to community engagement and benefit-sharing for clean energy projects.
We have emphasised the need for benefit-sharing arrangements that reflect local priorities and deliver real value to host communities.
Getting community engagement right is critical not only for local outcomes, but for Australia's ability to attract the capital needed to deliver the transition at scale.
Meeting Australia's 2035 ambitions will require sustained investment in cleaner technologies, energy systems and infrastructure across the economy.
The job we face as a nation is capturing that capital when the race is on elsewhere in the world.
It's easy to look at the United States and assume it reflects a new global order.
It doesn't.
Europe, China, other parts of Asia and the Middle East and beyond are all continuing down the decarbonisation path. In fact, in the first half of 2026, the United States had the second-highest emissions decrease out of all countries relative to the first half of 2025. They also broke the record for clean energy deployments in the first half of the year, adding over 17 gigawatts of solar, storage and wind projects combined in quarter two alone.
The International Energy Agency projects that global investment in clean energy will be nearly double investment in fossil fuels in 2026.
What we need to do is ensure Australia is able to position itself at the front of the queue in the chase for capital.
We have a range of competitive advantages to lean on -
an abundance of low-cost renewable resources, rich reserves of critical minerals, engineering capability, deep institutional expertise, and one of the largest pools of long-duration capital in the world through superannuation.
Our credible, legislated targets also matter.
But our policy settings have to remain fit-for-purpose to make the task of financing and delivering projects easier.
That has occupied the minds of the Authority's team, given our mandate to provide independent, expert advice and analysis to the Government on how to achieve Australia's emissions reduction goals.
We released a report last year called Unlocking Australia's clean energy potential, making specific recommendations to accelerate the deployment of renewable energy and strengthen the grid.
The report put a spotlight on the Capacity Investment Scheme.
For those unfamiliar with it, the CIS seeks to reduce financial risks for investors by providing a long-term revenue safety net via underwriting arrangements for renewable generation and storage projects.
For those more familiar with it, you may be aware the Government recently confirmed it would use the tender process to target projects closer to a Final Investment Decision.
Now, there's no doubt it has had some success in boosting investment, particularly in solar and battery projects. However, most of the successful tenders have not yet reached Final Investment Decisions. So far 27 CIS projects have reached FID: 16 batteries together adding 3.3 GW of dispatchable capacity and 6 solar and 5 wind projects together adding 3 GW of generation capacity.
While we are making some progress, we need to do a lot more to keep adding renewables to the grid so that we can meet our 82% target.
Renewables will continue to be important beyond 2030. Australia will still require a robust pipeline of investment in renewables and the Authority makes a clear case for retaining a policy that can stimulate generation capacity.
We then looked at other issues, including how efficiently new generation is able to connect to the grid.
To stay ahead of the curve on the closure of coal-fired power stations and meet the national objectives for an increasing share of the grid to come from renewables, grid scale solar and wind capacity need to increase from their current capacity of 23 GW to 61 GW by 2030, and almost double again to 117 GW by 2050.
It makes no sense to leave proponents starved of the information they need to secure an approval, their place in the queue or frustrated by a lack of resources to process applications.
We were pleased to see the government responded to these issues by giving the market operator extra resources to process connection applications quickly.
But our advice is that AEMO needs more resources to efficiently process a high volume of connections all the way to 2030 - not just deal with an existing backlog.
And project developers would benefit from clearer guidance on what's required of them in submitting applications.
Governments need to tackle the task of simplifying and coordinating project approval processes, rather than leave proponents bouncing between jurisdictions.
Some of those efficiencies will hopefully kick in as reforms to the EPBC Act come into effect.
But we shouldn't rely on hope for such an important change. We recommended the Government appoint an Energy Transition Coordinator to eliminate blockages and drive the delivery of priority renewable energy projects.
A dedicated coordination function of this kind could accelerate major infrastructure delivery and help manage the scale and complexity of Australia's energy transition.
It's simply a reinforcement that there's much to do, but nothing that's beyond us.
Harnessing the power of the sun and the wind, the nation's access to capital and the goodwill of everyone in the debate makes sense.
It's how we unlock the investment and projects needed to deliver the reliable, affordable and low emissions energy we all want.
It will propel our prosperity for decades to come and help ensure Australia plays its part in keeping a 1.5°C future within reach, while limiting the risks and impacts of a warming world.
Thank you once again for the invitation to be with you today.
