Public Policy Papers

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Parent Category: Publications

Author: Robert Pritchard, Energy Policy Institute of Australia

Key Points

• By its 20-year ban on nuclear power generation, Australia has lost considerable ground. The ban has:

1. 1. contributed to the destabilisation of Australia’s power supply system

   2. disregarded a means of significantly reducing greenhouse gas emissions

   3. failed to enhance Australia’s scientific and engineering skills

   4. failed to optimise the development of the Australian economy and

   5. turned a blind eye to Australia’s national security.

• Over the next decade, Australia could regain some of its lost ground by lifting its nuclear ban and allowing energy innovation to flourish under appropriate regulation.
• Australia should capitalise on its small but world-class base that has been built up from 60 years’ successful and incident-free experience in operating nuclear research reactors and producing nuclear medicine.
• A strategic initiative for any Australian state or territory would be to sponsor the development of a model town, or hub, for energy innovation and economic development, which could be in an inland location. Any such hub should be anchored to safe, complementary, zero-emissions technologies, including modern nuclear technology, and be connected to the transmission grid to enhance system optimisation at least cost. Potential sites should be identified through community engagement and developed with community support.

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Parent Category: Publications

Author: Robert Pritchard, Energy Policy Institute of Australia

Key Points

• Reliability of supply is what matters for the electricity industry – not the debate over the cost of renewables versus coal.
• In power system planning, the risk of early closure of ageing generation capacity must be countered by the timely procurement and installation of all necessary elements of replacement infrastructure of the required scale. The aim must be to provide whole-of-system optimisation in a timely manner at the least cost.
• Every power system needs its own system-specific planner. Greater interconnection with adjacent systems will increase reliability of supply but does not obviate the need for system planning. In Australia, the planning function should not be entirely delegated or subjugated to a body concerned with the ‘national interest’, given the changing features of the interconnected NEM, and given the yet-to-be-settled National Energy Guarantee (NEG) scheme.
• Each Australian state may need an independent strategic planning and system planning facility, working transparently and constructively with COAG and the NEM institutions, but focussing on state system-specific needs.

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Parent Category: Publications

Author: Robert Pritchard, Energy Policy Institute of Australia

Key Points

• Australia is presently on track to meet its emissions reduction commitments but it has destabilised its power system and created an insidious problem of power unreliability and unaffordability. This is threatening its energy-dependent industries and its national prosperity.
• There has been a tendency by governments to intervene in energy markets. However, competitive markets must continue to play the central role in energy policy.
• There has been too much short-term policy thinking. To counter this, a strategic energy plan, albeit focussed on the electricity sector, is to be developed by a new Energy Security Board (ESB).
• All technologies need to be on the table for consideration by the ESB.
• Solutions should be commensurate with the scale of the task and the time required for their installation, as well as on the combination of technologies that will deliver whole-of-system optimisation at the least cost.
• Solutions should also be matched to Australia’s energy resource endowments - in order to provide a firmer foundation for the nation’s future prosperity.
• Beyond the ESB’s strategic plan for the electricity sector, there remains a need for a bolder, more innovative, more collaborative and community-focussed energy policy. This will light the way for future investment across the entire energy sector – and will provide a common point of reference for community education.
• Consideration still needs to be given to a national energy commission to replace the present suboptimal governance structure.

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Parent Category: Publications

Author: Stephen Wilson, Cape Otway Associates

Key Points: 

• Australia faces the replacement of more than two thirds of its power generation capacity over the next three decades.
• It is believed by many renewable energy advocates that variable renewable energy (VRE) options could replace coal- and gas-fired capacity without compromising the reliability of the power system. However, there is little understanding of the likely costs of doing so.
• Most models of future full system costs are based on unrealistic assumptions. This paper outlines an approach to future costs that is based on a more realistic understanding of the technologies involved.
• To be deployed at system-wide scale in the future generation mix, wind and solar need backup or storage. This paper provides an indication of the cost level of technology pairs that is more realistically comparable with traditional dispatchable generation.
• The results imply that at current costs VRE options are unaffordable at scale. The costs of the VRE options considered by this paper vary from an estimated $125/MWh in the case of the wind/gas option to $1,200/MWh in the case of the rooftop solar/battery option at household level.
• The Levelised Cost of Energy (LCoE) approach does not provide an adequate foundation either for formulation of sound energy policy or for system planning.

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Parent Category: Publications

Author: Robert Pritchard, Energy Policy Institute of Australia

Key Points

• Australia has an energy crisis on its hands – with the continued forcing of renewable energy into the National Electricity Market (NEM), closures of power stations and concerns over the security and affordability of both electricity and gas.
• In October 2016, following a blackout and load shedding in South Australia, the nine-member Coalition of Australian Governments (COAG) agreed to appoint an independent panel to develop by mid-2017 a national reform blueprint to maintain energy security in the NEM.
• In March 2017, the government of South Australia announced that, whilst it would remain in the NEM, it would, for the security of the SA system, build a state-owned gas-fired generator and legislate to give itself powers to direct the NEM in the event of a shortfall or a failure of ‘market forces.’
• Disharmony amongst the Commonwealth and the States over the causes of the energy crisis or its solutions has raised a question of central importance: Is it time for Australia to throw off the chains of ‘cooperative’ energy governance?
• The door is open for a National Energy Commission to be established under Commonwealth law. 

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Parent Category: Publications

Author: Stephen Wilson, Cape Otway Associates

Key Points

• The Australian National Electricity Market (NEM), burdened by the effect of the Renewable Energy Target (RET) schemes, is no longer capable of delivering a reliable, affordable and sustainable electricity supply. The NEM, or the RET schemes, or both, will need to be changed to avoid serious failure of the power system in the future.
• This paper sets out in plain English a statement of the problem, a diagnosis of the underlying causes at the root of the problem, remedies that have been proposed to solve it, and a vision for reform that would require minimal design changes to create the next generation electricity market.
• Six symptoms of the problem evident in the NEM have been identified, which adversely affect power companies, as well as business and household consumers. The root causes are found in conflicts between the design principles on which the NEM is based and those of the RET schemes.
• Seven possible responses have been identified, which are considered remedies rather than options, as some of them are potentially complementary. Some remedies would involve retreating from the competitive electricity market reforms of the 1990s, while others would take the reforms to a more mature stage.
• The paper makes recommendations that could redress the root causes of the problem, with a minimum of disruption to consumers, the electricity system and the market, and reduce rather than escalate government intervention.

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