Australia-Israel Chamber of Commerce boardroom lunch keynote speech
The Hon. Matt Kean
Chair - Climate Change Authority
Check against delivery.
May I begin by acknowledging the Gadigal people of the Eora Nation as the traditional owners of the lands we meet on today, and pay my respects to their elders, past and present.
Thank you, Chris Flynn, for that warm introduction, and to Michelle Blum and other members of the Australia-Israel Chamber of Commerce for the kind invitation to address you today.
I can’t believe it’s almost nine years since I led an NSW delegation to Israel, as the Minister for Innovation and Better Regulation.
That visit left me with many fond memories, not least Israel’s renowned prowess at fostering start-ups, and turning them into commercial successes.
I’ve been asked to speak today about how Australia can secure a low-carbon grid, including how Australia’s energy infrastructure can be protected in the digital era and provide a broader perspective on climate policy.
I should note at the outset that energy market authorities are rightly monitoring the evolution of cyber, data and technology threats to our energy infrastructure.
Those developments, though, are not an area of focus for the advice we provide to the government on climate policy.
Having attended Senate Estimates just last week, I think it would be wiser for me to direct any questions on that subject to more expert agencies.
That approach doesn’t necessarily placate the politicians but they do tend to move on to the next subject quickly!
In any case, there is more than enough material about the energy transformation to consider; how it’s under way and gathering pace.
I’ll be covering a bit of ground today, from exploring the growing threats from climate change, to the synergies between climate security and energy security.
Then I’ll detail how new tech is helping to fortify the grid, and touch on how electric vehicles could help too.
The main takeaway is the energy market is dynamic and exciting, and generating a wealth of opportunities for nimble and entrepreneurial companies.
We’re seeing how households – and many companies, too – are taking more control of how they generate or source their energy, how they might store it and, even how they can turn a profit by feeding power back into the grid.
Before I dive deeper into the changes, can I just note the recent promising moves on the electricity price front.
The Australian Energy Regulator, and its equivalent in Victoria, the Essential Services Commission, cut the default offers for most residential and all small businesses in the key population regions of eastern Australia.
The biggest falls will be in the order of 11.3% for the coming 2026-27 year.
Extra renewable energy and storage were cited by the regulators as key drivers in the lower default offers.
It’s important to acknowledge falls in prices because the public understandably tends to pay a lot more heed to prices when they rise.
Regulators, of course, do much more than set prices when it comes to the power grid.
As I will sketch out shortly, the grid is becoming much more dynamic, and it’s no small achievement for our market designers and operators to keep up with the changes.
The near-term power price drop is one sign that the transition towards a low-carbon grid is picking up pace.
And if we can decarbonise the power sector, the potential for the electrification of almost everything else can really help Australia make headway towards our legislated climate goals for 2030 and 2050.
In between sits the country’s 2035 emissions reduction goal, which the CCA advised the Government on last year and I’m glad to say they accepted our advice.
Our role is to give advice on climate adaptation to the changes already in train, and how we can curb emissions to minimise future disruption.
Or, to put it bluntly, we must manage the unavoidable while striving to avoid the unmanageable.
It’s easy to forget the reasons for climate action when the daily news flow so thoroughly crowds out our attention on longer-terms matters.
But until atmospheric levels of greenhouse gases stabilise, we will continue to trap ever more heat from the sun in our atmosphere, oceans and on land.
That shows up as the Earth’s energy imbalance, which keeps rising and is at a record high, the World Meteorological Organization, or WMO, reported recently.
The past 3 years were the hottest 3 years on record, globally.
Should an El Nino event develop in the Pacific in coming months, as seems likely, this year and next will almost certainly feature among the hottest years on record, if not setting a fresh, unwanted, high mark.
As WMO Secretary-General Celeste Saulo said in comments accompanying the body’s latest State of the Global Climate Report:
“Scientific advances have improved our understanding of the Earth’s energy imbalance and of the reality facing our planet and our climate right now.
“Human activities are increasingly disrupting the natural equilibrium, and we will live with these consequences for hundreds and thousands of years.”
Sobering words, but we must keep them in mind. For some, efforts to curb our emissions are taken as a vanity project, or a luxury. Not the necessity that they are.
Now, this audience needs no reminder that developments in the Middle East matter, which brings me to the confluence of energy and climate security.
The theme of my speech, though, would not have varied much had we been meeting 13 weeks ago, prior to the start of the Iran war.
I would have argued then that the economics were already shifting in favour of taking climate action, quite apart from other imperatives.
And that Australia - with our abundant renewable energy resources above, and our rich critical mineral resources below – is poised to benefit from decarbonisation like few others.
Since then, of course, the world has been put on notice.
The closure of the Strait of Hormuz - blocking the transit of as much as a fifth of world’s oil and gas, and as much as 30% of some key fertilisers – has exposed the risk of relying on fossil fuels in a way that climate warnings have never matched.
Even if the Strait reopens, we have a clearer picture of how such fuels don’t just undermine our climate security.
They are bad for our economic security too.
Australians, who wondered whether their local service station might be out of petrol or diesel, won’t easily forget their vulnerability to molecules shipped over long distances.
Indeed, transported from a region prone to geopolitical gyrations – as you here today will understand better than anybody.
I was recently attending an event – Ecosperity - in Singapore and can tell you other nations are looking with urgency at how they can diversify their energy sources.
Homegrown electrons were increasingly appealing before and have lately become much more so.
The technological tides lifting renewable energy, storage, heat pumps, EVs, you name it, should give us optimism.
We can secure affordable, reliable energy that literally doesn’t cost the Earth.
So, let’s turn now to the technologies that not only give us a fighting chance to deal with climate change but also help with the cost of living.
It’s well-publicised, of course, that more than 40% of Australian homes now have solar panels.
Dare I say, the Government’s Cheaper Home Battery scheme might also have garnered some publicity.
After all, some 410,000 households – and counting - have taken up the subsidy to buy home battery systems since last July.
Contrast that sum with California, for instance, a trailblazer for so many global technologies.
That state, with a population about 50% larger than Australia’s, has added 260,000 home batteries, according to Bloomberg New Energy Finance. And that’s since the year 2020!
Other things are notable in relation to Australia’s binge on batteries.
Prior to the scheme’s start, the average size of a home battery installation was between 10 to 12 kilowatt-hours.
The Energy Department told Senate Estimates last week the average battery being purchased was 28.5 kilowatt-hours, or not far short of a tripling in size.
Something else that’s exciting is also under way.
While households have used the subsidy to bulk up on batteries, many of them have also grabbed the chance to either expand their array of solar panels, or to install bigger solar systems if they hadn’t already purchased one for their roof.
In April, solar PV sales for systems of less than 100 kilowatts in size rose to 442 megawatts in Australia, according to SunWiz.
That total was a record for any month, and almost double the level of April 2025.
We perhaps should not be surprised, since almost half of the battery installations have been accompanied by an upgraded solar PV system, or a brand - shiny - new one!
The Australian Energy Market Operator is seeking to analyse how all these batteries – plus larger solar systems – might be affecting consumer behaviour.
AEMO took a sample of 1000 households with solar PV of less than 20 kilowatts of capacity, and compared them with the same number of households that have both solar and storage.
They looked at how they behaved on 27 January, when Victoria had a record hot day AND record power demand for the state.
Despite these challenges, the state’s grid fared relatively well. AEMO was not required to issue any level of Lack of Reserve alerts in Victoria, the signal it sends to the market when it foresees potential supply strains.
AEMO’s analysis indicated that households with batteries did their bit to help – without any prompting. An “invisible switch”, if you like, rather than the “invisible hand” at work.
AEMO found households with batteries transitioned to exports later in that high-demand day than solar-only households, presumably once they had charged up their storage.
By the evening, households with batteries reduced their average peak net imports from the grid by 1.4 kilowatts, relative to solar-only homes.
That might not sound like a lot, but AEMO reckons such actions, writ-large, would have helped the grid on a day when such support would have come in handy.
Remember that AEMO is relying only on limited samples so far but the early signs are promising.
And as an aside, it’s worth noting that the solar systems in solar-battery homes in Victoria were about two-thirds larger than those in solar-only homes.
This outcome is an indication of how the battery subsidies have encouraged the take-up of larger solar systems.
And remember that the overall battery scheme has some way to go, with $7.2 billion allocated in the Budget over 4 years, and a total spend of about $8.5 billion, we heard at Estimates last week.
And with the cost of both solar and batteries expected to fall further as scale and innovation drive down production costs, these D.I.Y energy generation and storage opportunities will keep growing.
That day in January also gave us an insight into the potential if we can orchestrate those hordes of home batteries.
If we can find a way to routinely and transparently reward battery owners, we can encourage more such take-up of storage and more support for the grid when we need it.
We’ll also avoid a lot of spending on networks and other infrastructure – and smooth the path towards decarbonisation.
To ensure virtual power plants go viral, in terms of popularity, we’re going to need to understand much more about how households with lots of solar and a sizeable battery interact with the grid, and why.
There is a paradox at play. Remember, many owners of solar and batteries have bought such equipment to increase their independence from energy companies and may need some wooing to surrender some of that new-found freedom.
Australia is at the forefront of this distributed energy revolution, and if we can crack the code – not literally, mind – we'll have a business proposition to share far and wide.
The power sector, of course, has many components in flux, such as a doubling of grid-scale storage in the National Electricity Market in the 12 months to the end of March.
Interestingly, those big batteries have added about 11.2 gigawatt-hours of capacity. Almost as much as the 11.5-plus gigawatt-hours from the 400,000-plus new home batteries, over a similar timeframe.
I should add that this solar and storage story hints at another prospect of change, coming down many of our driveways- the surging sales of electric vehicles.
Globally, EV sales in 2025 made up about one-in-four new car sales, and about one-in-six in Australia. Rising petrol and diesel prices will likely turbo-charge those sales, if you’ll forgive me just one pun.
We can expect many new models to have bi-directional charging, meaning your car could help power your home or even discharge into the grid.
Remember, many EVs will pack in batteries of 60 kilowatt-hours of capacity – potentially a lot more. That amount is roughly double the average new battery being installed under the Cheaper Home Battery Scheme.
I’ve focused mostly on what’s happening on the homefront, let’s turn to another fast-changing phenomenon.
Many of you will be following the stunning rise of data centres. You might also have wondered how the grid is going to cope with such demand.
For some perspective, I note Bloomberg New Energy Finance recently estimated that EVs would account for 11% of final global electricity demand by 2050.
Data centres aren’t far behind, predicted to account for a 10% share of demand by mid-century.
But demand centres will be far more concentrated, of course, than the millions – perhaps billions – of EVs.
The data centre operators may well bring their own energy supplies with them, either in on-site generation or in power purchase agreements – like Amazon’s.
These centres could help accelerate the renewable energy transition.
Australia’s federal and state governments, with the exception of Queensland, last month [[May 8]] agreed that data centres in the NEM and the WA’s Wholesale Electricity Market should “invest in additional renewable generation and firming in their state of operation to fully offset their electricity demand and provide demand flexibility services to avoid additional costs being borne by other energy users”.
These centres should also “provide transparent reporting on their energy use and emissions production”, according to the communique by the energy and climate ministers.
Perhaps fittingly, we’re going to rely on a lot of artificial intelligence to manage all this complexity – a positive feedback loop for data centre demand, if you will!
Those same AI capabilities can also support AEMO to better manage grid reliability, and even help safeguard national energy security from cyberattacks that are as inevitable as they are unwelcome.
And, to conclude by circling back to where I started, all these developments – from new tech to having nimble firms and responsive regulators – are going to have to keep evolving.
That’s because climate change itself will provide its own challenges to grid stability.
We can expect more record heat such as we saw in January in Victoria. Next time, though, it might not arrive so conveniently on a Tuesday, one day after Australia Day, as was the case earlier this year.
A busier day, say in February, when schools and businesses are in fuller swing, might have placed more strain on Victoria’s grid, and perhaps that of neighbouring states too.
Indeed, as I noted in an opinion piece in mid-January, Victoria’s grid was lucky not to have been hit by bushfires that raged across large parts of the state earlier that month.
Fires near Albury-Wodonga, in particular, were not that far from the key electricity interconnector between Victoria and NSW.
Had there been significant damage to transmission infrastructure, the power grid might not have coped so well as it did during the record heatwave when it arrived about a fortnight later.
And so, to conclude, the power grid, as I've detailed today, is going through an historic transformation.
If we manage the changes well, we can lower our energy bills even as we become more energy independent, and our grid can become more resilient even as we endure a more punishing climate.
And, as no small side-benefit, we can leave Australia and the world a better place than we found it.
Thanks for listening, and I look forward to fielding your questions.
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