Reliability incentives needed to lower power prices
Friday 9 June, 2017
The Finkel Review into the National Electricity Market has exposed reliability shortfalls in renewable energy, the Australian Power Project said today.
Australian Power Project CEO Nathan Vass said that while renewable energy was an important part of Australia’s energy mix in the future, greater incentives for reliable baseload generators such as coal and gas were needed to provide stability to the electricity market and drive down power prices.
“The Finkel report identified the intermittency of renewable energy as a cause of high power prices for families and businesses,” Mr Vass said.
“While much of the attention has been on incentives for lower emissions, the Turnbull Government should also consider more immediate subsidies for new investment into reliable baseload generators who underwrite the stability of our electricity market.”
Mr Vass said he was cautiously optimistic about the Finkel Review’s Clean Energy Target, as long as the emissions benchmark enabled new investment in high efficiency low emission generation.
“Over 20 countries have high efficiency low emission coal-fired power stations planned or under construction, including advanced economies such as the United States, China, Germany, Japan, South Korea and Poland,” Mr Vass said.
“Australia with all of its abundant natural resources should embrace the same high efficiency low emissions technology to stay competitive with other nations.
“But with most new builds for power stations requiring 3-5 years lead time, and the Finkel Review setting a three year notification period for retiring generators, incentives for new investment in traditional baseload power generation need to be set now.
“If we continue down the path of flooding the electricity market with renewables and no new baseload generation, the economic impact will be higher power prices, fewer jobs and less investment.”
Nathan Vass is a former energy and resources executive who created the Australian Power Project to promote sustainable national energy policy.