Public Policy Papers

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Parent Category: Publications

 Author: John McDonnell, Principal, McDonnell Policy Analysis

Key Points

• Populist policy interventions have destroyed political consensus and given rise to unsustainable energy policy in Australia.
• At the present time, neither of the major Australian political parties has an energy policy that can last past one electoral cycle.
• Politicians have to make difficult choices between the destruction of sectors of the Australian economy and minimising the risk from climate change. They need reliable evidence about costs to enable them to make these choices without causing unnecessary harm. They need to know the least-cost way of achieving the agreed level of emission reduction while producing reliable and stable energy flows. 

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Parent Category: Publications

Author: Robert Pritchard, Energy Policy Institute of Australia

Key Points

• The climate has become the main driver of change in the energy industry.
• In many countries, this has led to renewable energy becoming the fastest-growing form of low-carbon energy. However, power systems were never designed for renewable energy. Intermittency poses a challenge to power systems that is growing faster than the share of renewables. 
• Modern nuclear energy is becoming recognised as an essential technology in future low-carbon energy systems.
• Nine countries that are members of the Clean Energy Ministerial forum have already signed on to the Nuclear Innovation: Clean Energy Future (‘NICE Future’) initiative, with Canada positioning itself to play a prominent part.
• Nuclear energy is not only a low-carbon response to climate change but it represents a market opportunity to supply 20% of the world’s electricity by 2050.
• Australia has much to gain by joining the international NICE Future initiative and tracking and pursuing industrial-scale, fit-for-purpose, low-carbon energy solutions.

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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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