In October 2016, Australia’s energy ministers agreed to hold an independent review of the national electricity market “to take stock of its current security and reliability and to provide advice to governments on a coordinated, national reform blueprint”. The review was led by the Chief Scientist, Dr Alan Finkel AO, and has been called “the Finkel Review”.
Following the release of a Preliminary Report in December 2016, submissions for the final report were requested by 3 March 2017. 350 Australia made a submission.
You can access the full text of our submission here:
The Interim Report of this Review highlights the “Energy Trilemma”, with the need to combine and balance the objectives of lower carbon emissions, energy security, and affordability for consumers. Our submission addresses these three imperatives.
In our view, the need to reduce carbon emissions is paramount because of the need to provide security for current and future generations from the consequences of climate change, which include health impacts, sea level rise, more frequent heatwaves and more frequent natural disasters. To this end, we appeal for the national electricity objective (NEO) to be made more balanced, so that it includes a climate objective.
Consistent with this, we urge that the Blueprint delivered by this Review ensure that the National Electricity Market and its rules will deliver on Australia’s 2030 emissions reduction targets, and desirably exceed them in order to be consistent with a maximum 2°C global warming.
We note that a price on carbon would have allowed the market to make sensible decisions aimed at meeting the climate imperative alongside the needs of the various stakeholders. We deplore the fact that this mechanism was taken off the table for political and ideological reasons.
We urge the Review to adopt a vision in which, by 2030, the Australian electricity generation system has no fossil fuel generators, but only renewable sources and storage (and balancing) facilities. We cite recent research which indicates that such a goal is achievable and affordable.
In terms of energy security, we cite research which demonstrates that storage facilities such as battery storage and pumped hydro are able to provide the security and stability required by a 100% renewable energy grid. We urge the Review to support the rapid development of such storage and balancing facilities, in order to accommodate the rapid expansion of renewable energy sources.
We note that the South Australian blackout of 28 September 2016 was caused by a transmission failure, and we cite the observation by the CEO of Australia’s largest energy company, AGL, that a decentralised, renewables-based system would be inherently more secure, from a transmission perspective, than the current system.
In terms of affordability for consumers, we note that, under the existing NEM rules, companies are deliberately avoiding measures which would lower costs for consumers, in order to maximise their profits. We cite two examples to illustrate this. We urge the Review to examine how the NEM rules can be changed to ensure that affordability for consumers has priority over increased profitability of the generators.
The Final Report of the Finkel Review may be found here. It has disappointed many commentators who wish to see Australia do its fair share to hold global warming to less than 2°C. For example, see the comments here.