Australia must stop ‘whingeing’ and make a decision on national energy market, operator says

Australian governments need to make a decision about whether they want a national electricity market, or five state markets, rather than “whinge” at one another about not making a decision, according to the system operator, Audrey Zibelman.

a woman holding a video game: Photograph: Mike Bowers/The Guardian

© Provided by The Guardian
Photograph: Mike Bowers/The Guardian

Zibelman, the chief executive of the Australian Energy Market Operator, told an energy summit on Monday the energy market had reached “an inflection point”.


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“The decisions and actions that we take this year and next are really going to inform the outcome of this industry for the next several decades and it will have profound influence over the health of our energy economy and really the economy overall,” she said.

Zibelman said the time had come for governments to make a decision about system reforms being championed by the Energy Security Board. “What we can’t afford to do any more is not make a decision and continue to whinge to each other about not making a decision”.

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She said the energy market needed “the right kind of market signal” to ensure investors would build the infrastructure required to supply sufficient dispatchable or firmed power. “What’s most important is we have a mechanism that everybody agrees to and then people can rely on”.

“It is going to be helpful to have a single mechanism that we can use across the national energy market, otherwise, we have to make a decision as I said, well we won’t have a national market, we’ll have five state markets,” Zibelman said.

“One way or another we have to make the decision”.

Zibelman’s strongly worded intervention followed the New South Wales energy minister, Matt Kean, shrugging off criticism from his federal counterpart, Angus Taylor, of his $32bn renewables roadmap, saying the state policy has been extensively modelled and won’t drive early coal closure.

On Monday Taylor told an energy summit organised by the Australian Financial Review he wanted to see the modelling behind the state roadmap, which aims to support 12 gigawatts of wind and solar and 2 gigawatts of energy storage.

Video: NSW treasurer to hand down state budget today (Sky News Australia)

NSW treasurer to hand down state budget today



Taylor declared participants in the energy market needed to avoid “reactionary schemes that appease vested interests and ignore the interests of customers” – adding “the triumph of hope over reality and reason must be avoided”.

But Kean told the same forum the outlook in Australia’s energy market had changed fundamentally. A decade ago, he said, Australia risked reducing national economic growth if it moved too quickly to embrace low emissions technology. But now, if Australia failed to reduce emissions “we will miss the chance to underwrite our prosperity”.

a person in glasses looking at the camera: The CEO of the Australian Energy Market Operator, Audrey Zibelman, has told an energy summit a decision needs to made on whether Australia has a national energy market or five state markets.

© Photograph: Mike Bowers/The Guardian
The CEO of the Australian Energy Market Operator, Audrey Zibelman, has told an energy summit a decision needs to made on whether Australia has a national energy market or five state markets.

The state scheme involves the government awarding long-term contracts for three types of technology: wind and solar farms to be built in three regional renewable energy zones; long-duration storage that can provide back-up power for eight hours or more, likely to come from pumped hydro or batteries; and fast-start “firming” generation that ensures grid stability in a grid that increasingly runs on variable renewables, likely to come from batteries or gas.

Kean said he had worked “very constructively with minister Taylor” when he signed a bilateral agreement with Canberra early in 2020, “the $3bn memorandum of understanding which will see us deliver on the objectives that both Angus and I have set – cheaper reliable energy, cheaper reliable energy here in New South Wales”.

The subsequent state roadmap, released this month, which has cross-party support, was designed to ensure there was an orderly transition when ageing coal assets departed the system, rather than risking outages and price spikes, he said.

“We know that four of our five coal-fired power stations will come to the end of their technical lives and we need to make sure that the risk of high prices, the risk of a less reliable system, is not borne by consumers in the way it was when Hazelwood and Northern closed unexpectedly,” Kean said on Monday.

“We need to make sure we have the right regulatory settings and the right investment signals to make sure that the private sector will deliver the infrastructure we need to keep the lights on and drive prices down – and that is exactly what our roadmap does.”

Related: NSW promises to build more renewable energy than Victoria and Queensland combined

The NSW minister said Taylor was “rightly” concerned about safeguarding grid reliability and affordable prices. He would work with his federal counterpart to deliver both.

The state roadmap had been extensively modelled and “it will not bring forward the early closure of coal, in fact what this is all about is making sure we have the replacement of infrastructure before existing infrastructure closes”.

The energy company AGL has expressed some reservations about the scheme, and the business community is concerned that the ongoing lack of a transparent national policy is encouraging the states to go their own way. But Kean hit back: “I’m not here to support vested interests, I am here to support community interests, and that’s what this policy does.”

The spat between Kean and Taylor comes as Scott Morrison used a contribution at the virtual G20 summit at the weekend to declare safeguarding the planet was an “ongoing, long-term and collective responsibility” and nations “must pursue economic models that support growth and sustainability”.

Separately, the commonwealth and Victoria have reached a $200m agreement for transmission infrastructure. The two governments have agreed to jointly underwrite early works to progress the Victoria to NSW interconnector west project – with a preferred route known as KerangLink – so that it can be delivered by 2027.

It is envisaged the project will deliver an extra 1,800 megawatts of capacity during peak demand periods and allow Victoria to export 1,930 megawatts to NSW.

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