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Clean Energy Briefing Ahead of COAG Energy Council Meeting

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Posted on 22 November, 2019

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Addressing the dramatic slow-down in investment in large-scale renewable energy should be the highest priority for COAG Energy Council when it meets on 22 November for the first time in almost a year.

New clean energy investment has slowed significantly in 2019, with average quarterly investment in new generation capacity this year just over 500 MW per quarter compared to over 1600 MW per quarter in 2018. This reflects a reduction of over 60% from 2018 levels.

A prolonged slow-down in new investment presents a major risk to Australia. A sustained slow-down in the level of new large-scale generation will have a dramatic impact on Australia’s energy prices and reliability, at a time when existing coal-fired generation is becoming less reliable and is increasingly exiting the system.

This slow down in new investment is the result of a range of increased risks and barriers relating to challenging grid connection processes, underinvestment in electricity transmission, lack of long-term energy policy and an energy market no longer fit-for-purpose.

COAG Energy Council must recognise the importance of new investment in delivering affordable, reliable and clean energy system and to take immediate action to reduce the growing risks and barriers to new investment.

The CEC has written to every energy minister ahead of the COAG Energy Council meeting with recommendations:

  • The COAG Energy Council should not endorse the AEMC’s approach to progressing its proposed access model (COGATI). Instead, it should task the AEMC to undertake quantitative analysis and further detailed design development to demonstrate the proposal delivers a net market benefit and ensure its practical implications are well understood and tested.
  • task the AEMC and AEMO with pursuing reforms of the grid connection process and the MLF regime as a priority.
  • The COAG Energy Council should reaffirm its commitment to effectively actioning AEMO’s Integrated System Plan
  • task AEMO and the AEMC to develop clear ancillary services markets that recognise and monetise the value of services such as inertia, fast frequency response and voltage support.
  • support long term energy policy certainty, through a combination of harmonisation of state targets and schemes, refinement to existing policy measures (such as the Emissions Reduction Fund) to support new clean energy investment or progress new coordinated policy measures such as the National Energy Guarantee.
  • The COAG Energy Council should endorse the National Hydrogen Strategy.