PM drops Clean En­ergy Tar­get

The Australian Energy Review - - NEWS - El­iz­a­beth Fabri

THE Turn­bull Govern­ment has made the de­ci­sion to ditch the 50th rec­om­men­da­tion put for­ward in chief sci­en­tist Dr Alan Finkel’s en­ergy blue­print, in favour of a new en­ergy pol­icy that aims to de­liver more af­ford­able and re­li­able elec­tric­ity.

The Na­tional En­ergy Guar­an­tee (NEG), formed by the COAG En­ergy Coun­cil’s re­cently es­tab­lished En­ergy Se­cu­rity Board (ESB), will be made up of dual guar­an­tees that re­quire elec­tric­ity re­tail­ers across the Na­tional Elec­tric­ity Mar­ket (NEM) to meet their load obli­ga­tions with a port­fo­lio of re­sources.

The first, a ‘re­li­a­bil­ity guar­an­tee’, will be set by the Aus­tralian En­ergy Mar­ket Com­mis­sion (AEMC) and Aus­tralian En­ergy Mar­ket Op­er­a­tor (AEMO), to de­liver the right level of dis­patch­able power needed in each State through ready-to-use sources such as pumped hy­dro, bat­ter­ies, coal and gas.

An ‘emis­sions guar­an­tee’ to be de­ter­mined by the Com­mon­wealth and en­forced by the Aus­tralian En­ergy Reg­u­la­tor (AER), will also be im­ple­mented to en­sure Aus­tralia meets its Paris tar­gets.

Prime Minister Mal­colm Turn­bull de­scribed the new plan as a “game-changer” to en­cour­age in­vest­ment in all forms of power, while driv­ing down prices for con­sumers.

“Past en­ergy plans have sub­sidised some in­dus­tries, pun­ished oth­ers and slugged con­sumers, the Govern­ment will take a dif­fer­ent ap­proach,” Mr Turn­bull said.

Un­der the NEG, coal, gas, hy­dro and biomass will be re­warded for their dis­patch­a­bil­ity, while wind, so­lar and hy­dro will be recog­nised as lower emis­sions tech­nolo­gies but will no longer be sub­sidised.

This would in turn give en­ergy re­tail­ers full flex­i­bil­ity to mix and match the type of gen­er­a­tion they want.

“Our plan has no sub­si­dies, no cer­tifi­cates, and no tax,” he said.

“It cre­ates a level play­ing field for the first time; no more in­dus­try pol­icy, no more pick­ing win­ners, no more favour­ing one tech­nol­ogy over the other, but sim­ply en­sur­ing that we have a re­li­able en­ergy sys­tem, that we keep the lights on, that we do so in a way that is af­ford­able and of course meet our in­ter­na­tional com­mit­ments.”

In a let­ter ad­dressed to Fed­eral En­ergy minister Josh Fry­den­berg, the ESB stated un­der the NEG typ­i­cal house­hold bills would fall by an av­er­age of $110-$115 per year be­tween 2020 and 2030.

“Whole­sale prices are ex­pected to de­cline by 20-25 per cent per an­num over the same pe­riod,” the ESB stated.

How­ever, AEMC chair John Pierce, who also sits on the ESB, told Sky News some mod­el­ling showed the sav­ing could be as low as $25 a year in 2020.

ESB chair Dr Kerry Schott said the obli­ga­tion to have a re­li­able power sys­tem was now in­ti­mately linked with an emis­sions re­duc­tion tar­get.

“If you don't have those two things linked to­gether, you have a dan­ger of an in­crease in in­ter­mit­tent re­new­ables with­out hav­ing a re­li­able and dis­patch­able power to go with it," Dr Schott said.

“And it's very im­por­tant that you al­ways have dis­patch­able power where you have in­ter­mit­tent re­sources.”

“It is not Aus­tralia that is just fac­ing this is­sue, it’s an is­sue all coun­tries are fac­ing as the pen­e­tra­tion of re­new­ables is go­ing up.”

Dr Alan Finkel said he was pleased the Fed­eral Govern­ment had asked the ESB – one of the key rec­om­men­da­tions from his re­view – to pro­vide ad­vice on the mat­ter.

“Con­sist­ing of the en­ergy mar­ket reg­u­la­tors and an in­de­pen­dent chair and deputy chair, it is the coun­try’s most au­thor­i­ta­tive voice in en­ergy mat­ters,” Dr Finkel said.

“Suc­cess of the pro­posed emis­sions and re­li­a­bil­ity guar­an­tees in the Na­tional En­ergy Guar­an­tee will de­pend on ex­ten­sive con­sul­ta­tion by the En­ergy Se­cu­rity Board with all mar­ket par­tic­i­pants.

“With the adop­tion of a process for an or­derly tran­si­tion, Aus­tralia will be able to strate­gi­cally man­age its elec­tric­ity sup­ply for max­i­mum ben­e­fit.”

The COAG En­ergy Coun­cil will meet in Novem­ber to dis­cuss the pol­icy plan.

All im­ages: Sahlan Hayes, Of­fi­cial Pho­tog­ra­pher of the Prime Minister.

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