The Business Council welcomes the COAG Energy Council’s commitment to an independent review by Dr Alan Finkel to develop a national electricity market blueprint that will support the markets' transformation and ensure a secure, affordable and sustainable supply of electricity.
“With the increasing penetration of renewable energy the range of services required to balance the electricity systems are changing. The current design of Australia’s electricity markets is no longer ‘fit for purpose’ for the evolving nature of electricity supply and demand,” Business Council Chief Executive Jennifer Westacott said.
“The system operation and market design needs to ensure that the full range of services required from electricity generators is delivered and that there are sufficient signals for new investment when and where required. Any changes must be in the long-term interests of customers.
“Within the next decade, at least two more large coal-fired generators are expected to close. With new investment in replacement coal-fired generation unlikely, wholesale electricity prices are likely to rise.
“If Australia’s electricity system is to significantly reduce its emissions by 2050 then renewable energy will be a key part of this transition. However, both the pace of transition and resulting market structure will be critical and we must get it right for the sake of all electricity customers.
“Unilateral action by state and territory governments can undermine progress towards reducing the electricity sector’s emissions at lowest possible cost while delivering a secure and affordable system.
“Dr Finkel's independent review is an opportunity to consider the full range of views and policy differences and bring them into a cohesive national blueprint for Australia's electricity markets,” Ms Westacott said.