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ESB misses mark on final energy market design

Media reports on the final recommendations of the Energy Security Board’s (ESB) post-2025 market review are cause for concern according to the Clean Energy Council, with proposals including a number of retrograde and distortionary reforms that will create greater uncertainty for new investment in energy generation and prolong the life of polluting coal-fired thermal generation well beyond its use by date.

“The ESB’s proposed recommendations represent a missed opportunity to deliver an energy market that will facilitate the transition to clean energy in Australia,” said Clean Energy Council Chief Executive, Kane Thornton.

“Following two years of intensive consultation and analysis, the ESB appears to have gone against the advice of the entire energy sector to develop and propose reforms to network access and push for the introduction of a capacity mechanism.”

The proposal to establish a capacity mechanism is one of the most distortionary reforms imaginable, potentially pouring millions of dollars into the pockets of coal-fired power generators and prolonging their lives far longer than necessary. These reforms will make it far more difficult for state and territory governments to meet their emissions reduction targets and significantly slow the transition to a renewable energy future.

“Not only do these reforms fail to address the critical challenges facing energy investors, it will worsen the enormous uncertainty and risks facing investors and further distort the market,” said Thornton.

To make matters worse, the ESB has made little progress on critical reforms for distributed energy resources and long overdue transmission investment, deferring to the Australian Energy Market Commission to solve the issue of flawed regulatory tests and significant under investment in transmission. Instead of providing a clear blueprint for the future, this merely kicks the issue down the road and does nothing to address the significant uncertainty that continues to have a major impact on new clean energy investments.


For more information or to arrange an interview, contact:

Matt Hadley
Senior Marketing and Communications Coordinator, Clean Energy Council
[email protected]
+61 435 545 771