The Commonwealth Chief scientist Alan Finkel who chairs a five-member panel, presented a preliminary report to the Commonwealth Government on renewable energy, in early December 2016.
He outlined the need for serious and urgent market reform in Australia’s energy markets. He said the shift to renewable energy was unstoppable, and was being lead by the consumers, not the industry or government. He pointed out that the market structure and supporting policies were not in place to assist this transition.
He noted that consumers were being hit by soaring grid costs, at a time when they have technologies available to reduce their bills. He said these technologies, such as rooftop solar and battery storage, are the “antithesis of the centralised energy model”.
The Finkel report calmly notes these changes, and the solutions, in contrast to the defensive claims (for coal) of many politicians. The Report indicates that the lack of policy was a major reason South Australia was caught short in its blackout of September 28 2016 and why other States may also be at risk. He said the answer is to look forward to new technologies and system designs, not to old centralised thinking.
The Finkel preliminary review highlights the inconvenient truth that Australia’s policy settings are lacking and are not sufficient to meet Australia’s modest Paris climate targets.
The report notes that the Renewable Energy Target does not extend or act beyond 2020, and its effectiveness has been undermined by policy instability and uncertainty driven by numerous reviews.
It says options exist to reduce emissions. These included the emissions intensity scheme ruled out by the Government in late 2016, and carbon price scrapped by the Abbott Government.
The Finkel review looks at the issue of system security and reliability, particularly in the light of recent events in South Australia, Victoria and Tasmania. He said systems are available to effectively integrate variable renewable electricity generators into the electricity grid, but the existing systems will have to change.
The Report notes that the transition to a lower emissions economy “cannot be reversed”, and residential and commercial consumers are at the centre of this change, with distributed energy resources (such as solar and storage) allowing them to become investors and electricity traders – with or without the National Electricity Market.
Finkel’s report has similar conclusions to the findings of recent reports from CSIRO and Energy Networks Australia. These reports suggest that half of all Australia’s power needs will come from consumers by 2050.
It is clear the Commonwealth Government needs to get into step.