Lucy has worked for bp since 1998 in Australia, the US, UK, Europe and Singapore. In July 2022, Lucy was appointed vice president Hydrogen, Australia and Asia Pacific and the Project Director of the Australian Renewable Energy Hub. Lucy’s portfolio also includes Project GERI in Geraldton, and the Kwinana Energy Hub near Perth. This speech was delivered at the Australian British Energy Transition & Investment Summit in Sydney.
Good morning and thank you to the ABCC for hosting this event.
Let me start by acknowledging the traditional owners of the land on which we meet the Gadigal People of the Eora Nation, and pay my respects to Elders, both past and present, along with all First Nations people here today.
I’m Lucy Nation, the vice president of hydrogen for Asia Pacific and bp’s incoming Country President from July.
It’s a pleasure to join you today.
Based on two-and-a-half decades in the energy industry, it’s my firm belief that progress towards a net zero future requires a balanced approach.
A balance between carbon-efficient hydrocarbons, and low carbon energy.
A balance of the roles across government, industry and customers.
A balance that enables innovation and regulates practices.
So - today I want to talk about getting the balance right.
The window is closing for us to do our part for the Paris Agreement to keep global temperature rise below 1.5 or even 2 degrees Celsius.
Carbon emissions aren’t decreasing fast enough, and our energy demands continue to rise. We all know the energy transition is complex. While we need urgent action – this action must be orderly.
We require rapid investment in lower carbon energy, but also investment in today’s energy system to deliver secure and affordable energy for Australians.
While it’s impractical to completely replace coal and gas with 100% renewables in the short-term – there are reliable alternatives to decarbonize our existing energy supply.
For example, gas has an important and ongoing role to play in the energy transition for decades to come. It’s needed to support the energy transition by backing-up renewables, processing critical minerals and for manufacturing, not to mention, enabling production of crucial commodities, and supporting our regional partners to decarbonize.
We’ve long recognised this via the North West Shelf JV which delivers secure LNG to the region today – and we hope to continue this with the proposed Browse development. Alongside our JV partners, we’re also assessing carbon capture and storage in the north west, providing a carbon storage solution for domestic industry and our regional partners.
So, balance in this sense means rapidly scaling low carbon energy AND continued investment in gas.
bp’s global strategy supports this approach. We say - ‘And, not or’.
We’re transitioning from an international oil company to an integrated energy company; and we have an ambition to be a net zero company by 2050 or sooner.
This involves continuing to invest in oil and gas but reducing our production. And investing more in low-carbon energy such as solar, wind, renewable hydrogen and CCS, and installing EV charging points to complement our well-known fuel and convenience offer.
So, to Australia.
Let’s firstly acknowledge Minister Bowen’s and the federal government’s momentum in enabling Australia's net zero journey.
In less than two years they’ve developed, legislated and are implementing programs like the revamped Safeguard Mechanism, Rewiring the Nation and Hydrogen Headstart.
Minister Bowen, while feedback is never hard to come by in your job, let me say, this is being noticed for the right reasons. In London, bp’s most senior leaders say – the Australian government seems to understand the important role it needs to play in the energy transition which is keeping Australia on our list of countries to invest in.
bp recognises the role governments must play in creating the environment for stable, long term and competitive policy to attract and facilitate investment. A critical role of government is well designed ‘carrots’ and ‘sticks’ to drive the pace of transition.
Many green energy projects are not economic now due to the current carbon price. Companies will invest only with the knowledge that government policy, incentives and support will ensure projects are profitable in the future.
Thats why we’re looking forward to hearing more about the government’s proposed ‘Future Made in Australia Act’. It's my hope it can play a critical role in providing companies with the business cases they need to invest today for the future.
The government has rightly identified that we are in a global race to establish who the dominant nations of the coming decades will be. The US, India, the EU, the UK and multiple middle eastern countries are very active in the policy support space to promote investment in green industry.
Australia needs well-developed policy to attract the investment that will otherwise flow to these countries. The government policy framework is a significant decision criteria for bp on where it chooses to invest both its capital and major project capabilities globally.
It’s not just about government, industry and our customers, also need to step up. For industry, it’s being open on the attractiveness of the policy environment to invest in Australia’s energy system. For customers, it’s being clear on future energy demand and their capacity to pivot to increasingly decarbonised sources.
These roles must be balanced and progress together.
Many technologies such as EV charging, CCS, and hydrogen are in their early stages – so are yet to benefit from economies of scale. To ensure long-term competitiveness and affordability requires industry innovation. That’s why balance between regulation and encouraging innovation is so important.
So where do we see that balance most required in Australia?
First is cultivating a renewable fuels industry.
Nearly half of Australia’s total energy use comes from liquid fuels.
Renewable fuels can play a significant role in reducing Australia’s transport emissions, particularly in hard-to abate sectors like aviation, marine and heavy transport. Beyond decarbonisation, a homegrown renewable fuels industry can also deliver broader economic benefits. Farmers currently grow and export feedstock, such as canola, to overseas markets.
A domestic renewable fuels industry will provide local demand for feedstocks and, with the right policy settings, can drive agribusiness sustainability and value-adding opportunities such as feedstock processing. Australian production of biofuels with local feedstocks also offers immense opportunity to strengthen Australia’s liquid fuels security.
To make that happen, targeted measures are needed to incentivise the demand and supply of renewable fuels. Ongoing development grants will enable new projects, and to bridge the existing ‘green premium’ - contracts for difference for a period of time are required.
In Western Australia, bp is planning to repurpose our former oil refinery into an integrated energy hub, which will include the Kwinana Renewable Fuels project. Aiming to produce up to 10,000 barrels a day of biofuels, this could be Australia’s largest biorefinery producing sustainable aviation fuel and renewable diesel.
And as renewable fuel processing requires hydrogen, we’re pushing ahead with a proposal for co-located green hydrogen production.
Which leads me to my second point - fostering Australia’s hydrogen industry.
Hydrogen will help future domestic industries to emerge, including green steel manufacturing and critical mineral refining. It’s also a key plank of Australia’s ‘green energy superpower’ ambition.
At bp, we’re involved in three projects:
I do believe a subsequent wave of the program will be required to derisk the investments needed to unlock Australia’s true green hydrogen potential. Future investment will help build momentum, broaden the use cases, provide scale and enable existing industries to meet their post-2030 decarbonisation needs.
The last is modernising Australia’s electricity infrastructure.
The Rewiring the Nation program is a fantastic initiative.
We know existing electricity grids need major investment to expand and modernise to integrate renewable energy. But it must be timely and targeted to so companies investing in green projects have certainty before they reach final investment decisions. A balance between regional transmission lines and common user infrastructure will be required to connect renewable energy generation to customers, towns and regional communities.
At bp – we’re involved in several facets of the electricity system.
I’ve already mentioned our hydrogen projects, with AREH and GERI needing the development of critical transmission infrastructure to supply green electrons to customers.
We also have Lightsource bp, Australia’s leading solar developer and operator with more than 1GW of developed projects and a development portfolio exceeding 7.5GW. They are increasingly moving into energy storage solutions, such as batteries, to help balance supply and demand.
Through bp pulse we have plans to install 600 EV charge points across ANZ by 2025. Here we know the availability of fast-charging infrastructure creates a barrier to adoption, so targeting infrastructure to regional areas will support a more comprehensive network.
As we stand on the cusp of a new energy era, let us remember that today’s actions will create tomorrow’s future.
Australia, with its boundless potential, stands poised at the forefront of the energy transition.
I am optimistic that a balanced approach, with continued investment in our existing energy system – and – into low carbon energy will deliver a smooth transition for all.
On that positive note, I’d like to warmly welcome the Minister for Climate Change & Energy, the Honourable Chris Bowen to the stage.