The Finkel Review: chief scientist recommends stricter rules for renewable energy generators
The report will recommend measures to improve energy security, lower prices for consumers and a low energy target.
Australia’s chief scientist Dr. Alan Finkel will today release the Independent Review into the Future Security of the National Electricity Market. Early briefings indicate the report will recommend a set of strong reforms to the national energy market, including:
- Rules for new renewable generators to ensure reliable, continuous power generation and avoid outages. Under these proposals renewable energy generators would need to provide backup power generation and battery storage technology.
- A proposed Low Emissions Target to replace the existing renewable energy target and encourage investment in renewable energy without punishing cleaner carbon capture coal generators.
- Compelling power companies to give three years’ notice before closing power stations.
What is the Finkel Review?
Australia’s energy system is in trouble, with rapid price rises, the sudden closure of the Hazelwood Power Station and blackouts across South Australia.
The Independent Review into the Future Security of the National Electricity Market, conducted by Australia’s chief scientist Dr. Alan Finkel, will lay out proposals for meeting Australia’s energy challenges and keeping consumer prices from rising.
Does the government have to follow the Finkel Review's proposals?
No. The chief scientist can only make recommendations. It will be up to the state and federal ministers whether the review’s proposals become actual policies. But the report will be crucial in driving policy discussions whether some, all or none of its proposals are implemented.
RET, LET - What does it all mean for cleaner energy?
The Renewable Energy Target (RET) is a set of Australian government policies to encourage small and large-scale investments in renewable energy.
The Finkel Review’s proposed replacement, the LET, would function like an RET but with an added low emissions target. Dr. Finkel has suggested something around 0.7 tonnes of CO2 per megawatt hour of electricity.
With this target in place, all energy generators below the threshold would be deemed “clean energy” producers and thus be eligible for clean energy certificates. Under the looser LET rules some cleaner coal and gas producers would escape penalties.
This may be the crucial difference required for these proposals to become reality. However, it remains uncertain whether Australia can reach its Paris Agreement target of 26 to 28% reductions on our 2005 emission levels.
How will this affect my power prices?
It is impossible to say exactly how these changes would affect the average consumer’s energy bills. If the government accepts the Finkel Review’s proposals you can expect the following:
Good for energy prices
- More incentives and less penalties for energy producers is good news for consumers.
- With stronger regulatory powers governments could do more to set prices.
- Stricter energy security, generation and storage laws reduces the possibility of outages and price spikes.
Bad for energy prices
- Forcing renewable energy generators to adopt costly battery storage and backup power technologies will almost certainly drive up renewable energy prices in the short term.
Overall, the Finkel Review could signal good news for the average energy consumer: if the proposals become policies. In the meantime, energy consumers can always look at simple ways to cut down their energy bills in their own homes or compare energy providers to get a better deal on electricity and gas.