10 INSIGHTS 2018
Those interested in the development and
progression of Australia’s energy policy
looked on with interest in 2017 as the
debate bubbled away.T
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 Coun-
cil met in November to try and bring some clarity to the energy
dilemma. The meeting was its fi rst 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 announce-
ment 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
instead to sponsor a National Energy Guarantee (NEG) as a suc-
cessor 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 uneco-
nomic 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.RELIABLE POWER
AT A REASONABLE
PRICE
IS IT POSSIBLE AND HOW? John Kettle, Partner, McCullough Robertson