Two short weeks ago, the Harrison Group attended the AFR Business Summit. This year’s theme for the summit was ‘Crunch Time for Prosperity’, which couldn’t be anymore appropriate. Given the ongoing war in Ukraine, the slowing (but still prevalent) COVID-19 pandemic and rising global interest rates (and recession fears), this is a very turbulent time. Given these events, and that this is a business summit, you’d be right to think that some of the major topics would relate to say increased productivity, improving the Australian manufacturing sector, or finding ways to ensure reliable raw material supply chains. All of these were touched on, but so too was climate change and Australia’s potential response to a growing global renewables sector.
Regardless of the speaker or panel members, the drive to renewable, green energy and its impacts on business and trade were a major topic. With the Australian economy so dependent on the mining sector, the move away from fossil fuels in the coming years and decades is a cause of concern. But, innovation can and should drive us into new fertile business ventures. As battery storage systems and EVs grow in use and demand, the critical minerals needed to support these industries will also grow. Australia is uniquely positioned for this, as we have such a large amount of these minerals, especially lithium, throughout the country.
Along with the critical minerals and mining sector, the growing focus on the green hydrogen economy was also a hot topic at the summit. And while this discussion was due in part to Andrew Forrest’s Q&A talk during the summit, the sentiments were also echoed by the OECD Secretary General, Mathias Cormann. Green hydrogen production probably won’t be useful for battery storage or fuel cell vehicles – but it will have a place in steel production, firming energy supply, potentially diesel replacement and agriculture spaces. Regardless of end use, when European countries are signing contracts for green and blue hydrogen supplies, the market demand is there and growing.
Along with the science and technology of the renewable energy sector, the other hot topic was the Inflation Reduction Act in the US and its implications for climate and energy. The IRA is the single largest investment by the US government into clean energy and climate. It is setting the US up to be a world superpower in renewable energy technology, and far and away eclipses the National Reconstruction Fund, still to pass Parliament. And while much of the discussion regarding the IRA and its implications centred around the investment dollars that the US is offering to entice renewable manufacturing there, it doesn’t negate the development of the technology and IP here in Australia. The abundance of wind and solar here far exceeds the US, and that abundance could be used to generate green hydrogen to export to countries overseas. Along with exporting Australian energy supplies, expanding and improving on existing battery technology would allow for rapid electrification of the country and reducing the need for firming energy resources such as natural gas. In either event, the inherent natural resources of Australia, if properly developed through innovation and technological advances, can lead to another prosperity boom for the country.