Innovation, New Partnerships and Dynamic Business Models: The Keys to Digitising, Decarbonising, and Diversifying Australia’s Energy Future

Over the last seven years, NERA built an innovation ecosystem that helped the energy resources sector form new innovation partnerships, accelerate the growth of Australia’s smart technology SMEs, and transform the energy sector.

NERA well and truly led the journey of transformation in partnership with Australia’s energy resources sector, and we have confidence that this journey will continue to change Australia’s economy and add higher value technology and services, improve productivity and grow new supply chains.

As I write my final commentary on NERA’s seven-year partnership with Australia’s energy resources sector and look forward to the huge energy and economic transformation Australia must make over the next seven years, I am struck by the relevance of the famous French saying: “Plus ça change, plus c’est la même chose”; or in English: “The more things change, the more they stay the same.” Though the saying is often used negatively, taken to mean there are some things in the affairs of humanity that don’t fundamentally change, its meaning depends on your perspective. To that end, what NERA said in our first Annual Report back in 2016 remains highly relevant for today, now underscored with a new urgency and a need to accelerate change:

‘It is no longer sufficient to be a world leader in what we do now. If the industry is not prepared or is unable to reset their thinking, Australia’s energy resources sector will fail to achieve its potential. Achieving an Australian energy resources sector that remains globally competitive over the next 10 years and into the future will require significant innovation and a change in behaviour.

Whilst Australia remains a major producer and exporter of coal and natural gas, the global drive to address climate change, decarbonise and electrify is unstoppable and has far reaching implications for all industries and economies. In 2022, the new Australian Government formally lodged a 43% emissions reduction target by 2030 under the Paris Agreement and enshrined this and the target of net zero by 2050 in law with the Climate Change Act 2022. They also launched their Powering Australia Plan to create jobs, cut power bills and reduce emissions by boosting renewable energy.

The Russian invasion of Ukraine and ongoing war have heightened the urgency for an accelerated energy transition that prioritises energy security and sustainability.

Given the global reach of Australia’s energy resources sector, we must work to diversify the sector’s energy and product mix, decarbonise operations, grow innovative, resilient and environmentally friendly supply chains, and collaborate with global partners and customers to support their decarbonisation objectives and strategies.

In recent years, several major global developments have occurred. These include a significant decrease in the cost of renewable energy, particularly solar and wind power, a substantial increase in investments worldwide in clean technologies and advanced automation, and a focus on diversifying supply chains and enhancing local resilience. In addition, global initiatives such as the US Inflation Reduction Act (IRA) have been implemented to drive clean energy investment, and advancements in battery storage technology are set to play a crucial role in balancing the energy system. Lastly, comprehensive global sustainability reporting standards, exemplified by the EU’s directive on sustainability reporting, have been introduced, bringing about far-reaching changes.

Even though these developments and opportunities are starting to transform the Australian and global economies, the pace of C02 emissions reduction remains inadequate, highlighting the need for greater urgency. At the same time, a lack of productivity improvement remains a serious global challenge. Companies who are at the frontier of technological development have reaped gains but, more broadly, the impact of technology on productivity has been weak. Furthermore, there is a concerning trend of increased market power among “big tech” companies, contributing to less competitive and dynamic market structures. 

To remain competitive, Australia needs to attract significant energy resources investment, foster operational innovation, position its products and technologies as global leaders, and diversify its economy towards clean, high value, productivity enhancing and sustainable solutions.

The energy resources sector has an enormous challenge ahead as it navigates these head winds and transforms the industry, and new players with disruptive business models are entering the market and challenging the incumbents to innovate and change. One thing is certain: while the energy sector has seen significant change in the last seven years, innovation and partnerships remain as important today as they were when NERA opened its doors. And trust lies at the heart of these partnerships.

I am a huge believer in Shakespeare’s enduring relevance to our world. Despite the passage of time, his works continue to inspire and entertain across languages and cultures, even finding their way into contemporary pop songs. His cleverly weaved commentary can provide us with insight and wisdom, though always with context. In Julius Caesar, Brutus’s words remind us of the importance of seizing opportunities:

“There is a tide in the affairs of men.

 Which, taken at the flood, leads on to fortune;

 Omitted, all the voyage of their life

 Is bond in shallows and in miseries.

 On such a full sea are we now afloat,

 And we must take the current when it serves,

 Or lose our ventures.”

So, as NERA closes its doors, we are incredibly proud to have created genuine and lasting value and grown a local innovation ecosystem that reaches beyond energy resources into other industries, and beyond Australia into global markets. However, as Australia and the energy sector navigate this metaphorical “full sea,” it is critical to seize opportunities, collaborate, forge new partnerships and innovate. These endeavours are essential to support a prosperous, decarbonised, diversified and high-value economy that benefits all Australians. Embracing this path is not just an option – it is the only way forward.