Independent Review into the Future of the National Energy Market Released

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Independent Review into the Future of the National Energy Market Released

Last week, Australia’s Chief Scientist, Alan Finkel, released his independent review in to the state of the national energy market and proposed a structured method to resolve the current energy crisis. The Review was commission by the Council of Australian Governments following the large South Australian blackout in 2016. One core purpose of the Review was to navigate the issues of reliability, security and affordability in the National Energy Market.

The Review is based around three pillars, namely an orderly transition, better system planning and stronger governance.

Orderly Transition

Driving the transition away from fossil fuels in the National Energy Market is Australia’s international commitment to climate change. The Review noted that in order to achieve energy reduction and support security in the electricity sectors, clarity in policy and market mechanisms would need to be nationally consistent. The Review suggests several mechanisms such as security obligations or new energy producers and an energy reduction trajectory. A Clean Energy Target was suggested as the most efficient method to facilitate a just transition, which includes requiring a three years period of notice for the closure of large-scale conventional energy producers. Further details about the Clean Energy Target and associated mechanisms remain within the remit of the government.

Better System Planning

The Review suggested a grid-wide plan to assist in market certainty and long-term policy design. The Australian Energy Market Operator would retain control over the implementation and assist in the design of policy. This would include accounting for emerging technologies, support the changing nature of the workforce and utilise data as a basis for decision-making.

Stronger Governance

A strategic energy plan was suggested as a bipartisan mechanism to implement the recommendations of the review. Consistency in governance should be achieved by the development of an Energy Security Board to facilitate leadership in implementing the strategic energy plan

The Review in full can be read here.

 

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