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RELIABLE POWER AT A REASONABLE PRICE IS IT POSSIBLE AND HOW?

John Kettle, Partner, McCullough Robertson

Those interested in the development and progression of Australia’s energy policy looked on with interest in 2017 as the debate bubbled away.

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he market for smart energy management is gaining momentum as businesses take control of their energy costs and renew their focus on energy efficiency, demand management and on-site generation. On the policy front, things have moved a little slower. While the Renewable Energy Target (RET) has achieved years of continued success and stability, Australia is facing an uncertain future in terms of reviewing and refreshing a comprehensive long-term national energy policy. The Council of Australian Governments (COAG) Energy Council met in November to try and bring some clarity to the energy dilemma. The meeting was its first since the federal government announced its long-awaited response to the Independent Review into the Future Security of the National Electricity Market delivered by Dr Alan Finkel AO (Finkel Review). That government announcement in October decided against the Finkel Review’s proposal for a nationwide Clean Energy Target (CET) (despite accepting virtually every other Finkel Review recommendation), deciding subsequently

10 INSIGHTS 2018

instead to sponsor a National Energy Guarantee (NEG) as a successor to the RET which expires in 2020. The COAG meeting deferred the decision on whether to adopt the government’s NEG plan until April 2018. The states, as expected, have asked for more modelling of the NEG by the new Energy Security Board (ESB). South Australia has asked for an explanation from the Commonwealth as to why a CET is no longer acceptable, asserting that a NEG would “stifle investment in renewables, extend the life of dying, inefficient and uneconomic coal power stations, and enrich the generators with the most market power”. To proceed, the NEG requires unanimous support at COAG. So, for now at least, it remains a waiting game for business and consumer. What is inescapable is that there is no such thing as free reliable and sustainable energy. The question now is whether we want to pay a little bit more for reliability and security of supply, or a lot more in wider social welfare costs due to an unreliable, insecure system.

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