Finkel Review: Summary of submissions from energy industry

More than 360 submissions to the Independent Review into the Future Security of the National Electricity Market have been received.

Australia’s Chief Scientist and chair of the Review Panel Dr Alan Finkel said the submission ensure the Review is on track to deliver its final report mid-year.

“The breadth and depth of these submissions is a mark of the community’s determination to help shape the future of our electricity sector,” Dr Finkel said.

“It is also reflective of the message the review panel has received from the outset: a nation like Australia can and must rise to the challenges we face.

“These submissions are an important body of knowledge that will inform the Review in developing a comprehensive blueprint for government.”

Dr Finkel also acknowledged contributors to the broad consultations across Australia and overseas.

The Review held stakeholder and public meetings in Adelaide, Hobart, Melbourne, Brisbane and Sydney during late January and February that were attended by more than 450 people.

In addition, Dr Finkel and two panel members recently met with energy market experts in Europe and the United States, with a focus on energy market operation and regulation.

“The countries and jurisdictions we visited are well advanced managing the policy and technology driven changes that are transforming their electricity systems,” Dr Finkel said.

The Review was established in October 2016 and last December delivered its Preliminary Report to COAG.

SUMMARY OF SUBMISSIONS

Australian Energy Council

Australian Energy Council’s chief executive Matthew Warren said “recent price and reliability issues are not the result of the electricity market failing, but the result of sustained policy interference and resulting uncertainty”.

“This is driving up electricity prices to unsustainable levels. The impact on the industry, its customers – households and businesses – and the economy generally is now critical. We are now experiencing the legacy of sustained energy policy inaction: ageing power stations keep closing but there is no plan about how they will be replaced. We are running out of power.”

Clean Energy Finance Corporation (CEFC)

“Australia’s electricity system is seeing significant new investment, with clean energy solutions entering the market at increasing scale and price competitiveness as we look to achieve an energy system that is secure, affordable and sustainable.  We are confident that Australia’s energy mix can incorporate higher levels of clean energy with strengthened transmission, better demand management systems and increased storage capacity, through a planned and coordinated approach,” CEFC chief executive Oliver Yates said.

Energy Networks Australia (ENA)

The Finkel Review’s Energy Blueprint can make Australia’s energy system stronger if there is clear accountability for implementation, Energy Networks Australia CEO John Bradley said today.

“The greatest single risk to an efficient and secure energy transition is conflicting government policy and regulation in a national market,” Mr Bradley said.

“The Finkel Review is a watershed opportunity to reach agreement on a national approach to energy policy and regulation.

“However, energy customers need governments and industry to follow through, where too many reforms have sat idle.

“Developing the Blueprint for security, affordability and sustainability is hard enough but we also need to fix a broken governance system which doesn’t follow through and is mired in politics.”

Energy Users Association of Australia (EUAA)

“Energy markets are at the crossroads. This is a critical year where decisions made over the coming months will not only determine the direction of key energy market reforms but ultimately they will dictate what kind of industries make up the Australian economy,” said EUAA CEO Andrew Richards.

Australian Industry Group

Australian Industry Group’s submission urged a move beyond political rancor to build agreement around a new vision for Australian energy.

“Long-term, sustainable solutions are required but we also need measures that can have real impacts in the near-term. In particular, a ‘gas swap’ whereby commercial arrangements would be made to divert gas currently destined for export back into the domestic market and a nationwide effort on lifting energy efficiency could deliver decisive benefits while longer-term solutions are implemented,” Ai Group chief executive Innes Willox said.

“Australia’s energy systems are not delivering affordable, reliable or sustainable energy. Nor are they attracting the investment needed to improve performance. Industry and households will continue to suffer rapidly escalating prices and supply instability unless our political leaders agree, deliver and sustain strategic reform of Australia’s energy markets and climate policy.”

APPEA

APPEA chief executive Dr Roberts said the Finkel Review was an opportunity for Australia to get its gas policies right.

“One of Dr Finkel’s key recommendations should be the immediate removal of bans and moratoriums on natural gas supply on the east coast. There are other initiatives that governments should consider to encourage more gas-fired generation, such as allowing gas projects access to funding from the Clean Energy Finance Corporation and the Northern Australian Infrastructure Fund. Gas has a critical role to play in a low-emissions future as both a replacement for coal and a partner for renewables.”

Clean Energy Council

Policy uncertainty and the slow pace of reform of an increasingly outdated electricity market are making the energy system more volatile and pushing up power prices, the Clean Energy Council said in its submission.

“A range of policy measures will be crucial to ensure the managed closure of high-emission power plants which are past their expected operating date, and to create investment confidence in new zero-emissions generation. It’s clear that renewable energy and battery storage are proven and available solutions for a secure energy system that is also affordable and clean,” chief executive Kane Thornton said.