Not surprisingly, as Australia maintains its status as the world’s leading coal exporter there was a focus on the more efficient use of brown coal, geothermal power and cleaner coal mining with the Prime Minister displaying an interest in the new geosequestration technology which forces carbon dioxide deep underground, limiting greenhouse emissions.

While admitting that greenhouse emissions are a major problem the Prime Minister maintained that Australia will be heavily reliant on coal-fired power generation for at least the next decade.

Among some of the green initiatives are $75 million to be dedicated to the development of Solar City trials of integrated sustainable energy systems in urban areas; $100 million to support commercial development of smaller-scale renewable energy technologies and $203 million in ongoing funding for low-emission technologies, including the continuing rollout of the Greenhouse Gas abatement Scheme.

One of the centerpiece statements was a $500 million fund to stimulate greater investment in demonstrating low-emission technologies across the full spectrum of energy sources. Technologies may include renewable and fossil-fuel supply technologies as well as energy efficiency, and can be for either stationary or transport energy.

“This initiative is expected to drive total investment of more than $1.5 billion in low emission technologies ranging from renewable energies to the more conventional fuel sources,” said Macfarlane.

Overall the key reform for the energy market will be the creation of the Australian Energy Market Commission (AEMC) and the Australian Energy Regulator (AER) in an effort to simplify the convoluted energy regulatory system currently in place.

“The sole purpose of these changes is to make Australia a more attractive place for new investors because between now and 2020 we need at least $37 billion in new power and gas infrastructure- just to keep pace with our growing energy demand,” said Industry Minister Ian Macfarlane.

“The bottom line is greater uniformity and transparency in a market which has been traditionally split along state and territory lines. This streamlined regulatory environment will translate to greater investment and safeguard our world-competitive energy prices for households and industry.”

Regional business will also benefit from fuel excise reforms which are expected to provide around $1.5 billion of excise relief over the period to 2012.

An excise credit will be available to all off-road businesses on all fuels (including petrol and LPG) while fuel used for other activities such as power generation, off-road transport and industrial applications will be excise free.

The energy policy, received cautious approval from several of the country’s energy administration associations, with several describing it as a move in the right direction, although still falling short of expectations.

“A major step forward in developing a long term sustainability strategy for Australia’s energy sector - but a mixed package when evaluated against the other benchmarks set by CoAG in 2001,” said Barry Jones, executive director of the Australian Petroleum Production & Exploration Association (APPEA).

Jones said that although the Commonwealth had over the past three years made a number of welcome initiatives in relation to encouraging petroleum exploration more needed to be done.

“While today’s policy statement reflects these decisions, more needs to be done to encourage exploration in frontier areas to drive self sufficiency up towards the 50% plus level in a decade and avoid a massive trade cost of at least $US30 billion over the period to 2015,” he said.

In relation to developing Australia’s abundant natural gas resources Jones said the policy “could have gone a lot further”.

“The policy recognises the capacity for Australia to become an even more important supplier of natural gas to international markets, and APPEA strongly welcomes the leadership shown by governments in promoting access for Australia’s LNG exports to international markets,” he said.

Both the Energy Retailers Association (ERAA) and Energy Supply Association (ESAA) have applauded aspects of the white paper but cautioned that more needed to be done to set effective national controls.

ERAA Executive Director, Deane Russell said “The package contained many initiatives that will go some way to capturing a lower emission future for Australia.”

The ERAA believes there is still a need for both the Federal and State government to progress market reforms so that the community is able to respond to the real costs of energy supply.

“Uncontrolled demand and current energy price distortions mask the real costs to the community particularly to smaller consumers who contribute to a more “spiked” energy supply.”

ESAA chief executive Brad Page, welcomed the greenhouse gas abatement aspects of the paper saying it addressed many of the key issues of concern to the electricity and gas sector.

However, Page said the Statement could have been strengthened by the Government setting a long term target for greenhouse gas emissions.

“The stationary energy sector makes large investment decisions, many worth hundreds of millions of dollars. The resulting assets last for 35 to 50 years. We need to know what level of greenhouse emissions the Australian economy is aiming for in 2050. Sensible investment decisions, including in new technology under the Low Emission Technology Fund (LETF), can then be made much more easily.”