The Australian government needs to make decisions about whether they want a national electricity market, or five state markets, rather than “nagging” each other about not making decisions, according to systems operator Audrey Zibelman.
Zibelman, Australia’s chief executive Energy Market operators, however, said at an energy summit on Monday that the energy market has reached a “turning point”.
“The decisions and actions we take this year and next year will really inform the results of this industry over the coming decades and they will have a profound effect on the health of our energy economy and the economy as a whole,” he said.
Zibelman said it was time for the government to make a decision on the reform of the system being championed by Energy Security Council. “What we can’t do anymore is not make decisions and keep complaining about each other about not making decisions.”
He said the energy market needed “the right kind of market signal” to ensure investors would build the infrastructure needed to supply adequate deliverable or compacted power. “The most important thing is we have a mechanism that everyone agrees on and then people can rely on it.”
“It would be very helpful to have one mechanism that we can use in the national energy market, otherwise we have to make decisions like I said, we won’t have a national market, we will have five states. the market, “said Zibelman.
“One way or another we have to make a decision”.
Zibelman’s emphatic intervention followed New South Wales Energy Secretary Matt Kean shrugged off criticism from his federal counterpart, Angus Taylor, about a $ 32 billion renewable energy roadmap, saying state policies had been modeled extensively and would not encourage early coal closure.
On Monday, Taylor said at an energy summit hosted by the Australian Financial Review that he would like to see the modeling behind it state road map, which aims to support 12 gigawatts of wind and solar power as well as 2 gigawatts of energy storage.
Taylor argues that participants in the energy market need to avoid “reactionary schemes that appease self-interest and ignore customer interests” – adding that “the triumph of hope over reality and reason must be avoided”.
But Kean said at the same forum that the prospects for the Australian energy market have fundamentally changed. A decade ago, he said, Australia risked reducing national economic growth if it moved too fast to embrace low emissions technologies. But now, if Australia fails to reduce emissions “we will lose the opportunity to ensure our prosperity”.
The country scheme involves awarding long-term government contracts for three types of technology: wind and solar power plants to be built in three regional renewable energy zones; long-term storage that can provide back-up power for eight hours or more, most likely from pumped hydro or batteries; and the generation of fast-starting “buckling” that ensures grid stability in an increasingly varied network of renewable energies, most likely from batteries or gas.
Kean said he had worked “very constructively with minister Taylor” when he signed a bilateral agreement with Canberra early 2020, “$ 3 billion Memorandum of Understanding that will allow us to achieve the goal that Angus and I have set – reliable energy cheaper, reliable energy cheaper here in New South Wales ”.
The next state roadmap, released this month, which has cross-party support, is designed to ensure there is an orderly transition as aging coal assets leave the system, rather than risk outages and price spikes, he said.
“We know that four out of our five coal-fired power plants are about to expire and we need to ensure that high price risks, unreliable system risks, are not borne by consumers like when Hazelwood and Northern closed unexpectedly,” said Kean, Monday.
“We need to make sure we have the right regulatory settings and the right investment signals to ensure that the private sector will provide the infrastructure we need to keep the lights on and lower prices – and that’s what our road map does.”
The NSW minister said Taylor was “right” concerned about maintaining network reliability and affordable prices. He will work with federal partners to provide both.
The country roadmap has been modeled extensively and “it will not lead to an earlier closure of coal, in fact the most important thing is to ensure that we have infrastructure replacement before the existing infrastructure closes”.
Energy company AGL has raised some objections to the scheme, and the business community is concerned that the lack of transparent national policies is pushing states to go their own way. But Kean replied: “I’m not here to support self-interest, I’m here to support community interests, and that’s what this policy is doing.”
The clash between Kean and Taylor arose when Scott Morrison used contributions to the virtual G20 summit over the weekend to declare guarding the planet is a “collective, long-term and sustainable responsibility” and the country “must pursue an economic model that supports growth and sustainability”.
Separately, the Commonwealth and Victoria have reached a $ 200 million deal for transmission infrastructure. The two governments have agreed to jointly secure initial work to advance Victoria’s western interconnector project to NSW – on a preferred route known as KerangLink – so that it can be delivered by 2027.
It is estimated that the project will generate an additional 1,800 megawatts of capacity during peak demand periods and allow Victoria to export 1,930 megawatts to NSW.