The Finkel review into the future security of the National Electricity Market was released today. Australia’s chief scientist, Dr Alan Finkel, presented the findings in his 212-page report to the Council of Australian Governments (COAG) leaders in Hobart today.
The report laws out a blueprint for the future of the national energy market and calls for a clean energy target to help the sector transition from coal to renewables, and calls on governments at all levels to collaborate and end “the pathway is blocked by uncertainty about how to get there”.
“Governments need to agree on and implement a mechanism as soon as possible. Ongoing uncertainty is undermining investor confidence, which in turn undermines the reliable supply of electricity and increases costs to consumers,” the report says.
Business leaders and other experts have begun responding to what the Finkel review has to say.
Here are their views, starting with BCA boss, Jennifer Westacott:
Jennifer Westacott, CEO, Business Council of Australia
“Australia hasn’t a moment to lose now that we have a comprehensive, independent blueprint to restore the security, reliability and affordability of our electricity system.
“Many of the recommendations will need detailed consideration, but we can’t afford to lose momentum. Political leaders and market institutions, working closely with industry and customers, must press ahead towards implementation.
“Companies will only invest in new electricity infrastructure if they can see a stable policy framework, with minimal government intervention, that will endure whomever is in power. This means ending the ideological wars plaguing our energy system.
“The panel accepts that private investment in the electricity system will be essential to restoring security, reliability and affordability of power while maintaining a competitive economy.
“Dr Finkel rightly acknowledges the need for a long-term trajectory that allows market participants to determine the right energy mix, and a Clean Energy Target to send the signal for investment.
“Removing ideological preferences for specific fuels and technologies, and making sure all technologies contribute to security and reliability, will allow fair competition on a level playing field.
“Dr Finkel has run a thoroughly consultative process, considering hundreds of submissions with expert evidence from market participants and customers. His report provides our best hope for bipartisanship.
“We’re encouraged that the federal opposition has approached the government with an open mind and a willingness to reach a bipartisan solution.
“Australia’s recent history tells us that genuine industry consultation will also be essential.
“Many of our specific recommendations were picked up in the final report including: measures to address security concerns; improved market information; measures to ensure adequate ‘firm’ capacity in the system; and improved access to competitively priced gas.
“To implement this blueprint successfully, we must support policy initiatives such as the Clean Energy Target with a truly national policy framework. This will require the removal of state and territory based renewable energy targets and moratoriums on the development of our gas resources.
“A Clean Energy Target for electricity can be both fuel and technology-neutral and preserve the broadest range of options to meet future emissions reduction targets.
“A properly constructed Clean Energy Target, designed in consultation with industry and customers, could be an effective solution to deliver secure, reliable and affordable electricity while also assisting us to meet our emission reduction targets.
“We urge all stakeholders to give Dr Finkel’s report the careful, holistic consideration it deserves.”
AGL recognises the substantial work in the Finkel blueprint and is optimistic that the solutions it puts forward will deliver a more secure, reliable and affordable energy system, provided they are implemented in an integrated fashion.
AGL has long been advocating for changes in the market that better support and integrate renewable energy generation and deliver more reliable and affordable energy for customers.
While we have advocated for an Emissions Intensity Scheme (EIS) we believe a Clean Energy Target (CET) is a viable policy option and will unleash the necessary new investment in the national electricity market. We note that the Finkel review has found the resource costs of a CET are relatively similar to both business-as-usual and an EIS.
As the operator of the most efficient and lowest emissions coal-fired generators in Victoria and NSW, coupled with our extensive renewables and gas generations assets, AGL is well placed to continue to supply our customers while investing in new lower-emissions generation infrastructure.
We support the recommendations for advanced notice of closure of thermal plant and a ‘dispatchability’ requirement for new renewables when AEMO deems it to be necessary.
These mechanisms should provide greater system security and reliability, as well as a more orderly transition to a decarbonised energy system.
Our announcement this week to build a new fast-start, more fuel-efficient gas-fired power station in South Australia reflects our commitment to investing in a new modern energy system. We are hopeful that the Finkel blueprint does receive support so the market can invest with more certainty.
Dr Paul Burke, ANU Energy Change Institute and Crawford School of Public Policy
“One of the key problems facing our electricity sector has been policy uncertainty. There is much to gain from coming together to support a policy that provides a path forward for new low-carbon investment.
“The Finkel review has recommended a Clean Energy Target. The approach builds on Australia’s current Renewable Energy Target, and would help to ensure that there is sufficient investment in renewables to replace our ageing coal-fired generators.
“In terms of emissions policy, a simple carbon price would be best. Absent that, it makes sense to focus on policies to bring renewables onto the grid. A Clean Energy Target would help to do this.
“The Clean Energy Target would involve certificates only for new low-emission generators and existing low-emission generators that increase their output. This targets the scheme on new investment.
“Rapid reductions in the costs of renewables and energy storage make this an exciting time for the electricity sector. Hopefully Australia will get on with the job of moving to a low-cost, low-carbon electricity system.”
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.