For the past year we’ve been waiting with bated breath as the Australian Energy Market Commission decides on the future of smart, precinct-based energy sharing, with the decision facing a series of postponements.
We referred to it a few times in our Renewable Energy: Joining the Zero Carbon Revolution ebook as a necessary piece in our clean energy future puzzle that would allow buildings to trade clean energy with one another cost-effectively. Everyone we spoke to was eagerly awaiting the September announcement.
What came today shocked many – a “more preferred rule change” that dismissed entirely the notion of local generation network credits as a way to incentivise sharing, and instead putting forward a suggestion to remove information barriers many in the industry say are already largely gone.
So what the hell’s going on?
Some put the blame at the feet of the National Electricity Objective, enshrined in law and to which the AEMC must refer in its rulings.
It states: “The National Electricity Objective is to promote efficient investment in, and efficient operation and use of, electricity services for the long-term interests of consumers of electricity with respect to price, quality, safety, reliability, and security of supply of electricity; and the reliability, safety and security of the national electricity system.”
No mention of environmental outcomes. No mention of social outcomes. No mention of the pressing need to decarbonise our economy.
What’s galling is the Institute for Sustainable Futures report found $1.2 billion in economic benefits from providing local network credits and local energy trading, without looking at things like environmental or social outcomes. (Yes, their solution was a little different to the one put forward by the Property Council, Total Environment Centre and City of Sydney, but instead of the AEMC incorporating this into a preferred rule, it ignored it entirely and released a rule that failed to address the problem.)
So imagine the benefits had the ISF looked at environmental and social outcomes. Massive.
It makes one wonder, what if the NEO was updated to reflect the world we now live in? A world that demands strong action on climate change and the enablement of a variety of renewable energy technologies. Well, it may not have been so dismissive of the rule change put forward.
Indeed, one of the proponents of the rule change, the TEC, is now calling on state and territory energy ministers to change the NEO to reflect the urgent need to decarbonise our economy, and to help Australia meet its Paris Agreement obligations.
It’s backed up by activist group Solar Citizens.
“If we are to meet our climate targets and transition our energy system in a way that is fair, decisions about how our energy system is run have to consider these environmental and social factors,” Solar Citizens consumer campaigner Reece Turner said.
On affordable housing
It’s not just the energy market that’s hamstrung by legislation.
In NSW, people are fed up with the government failing to address affordable housing on government owned land.
Part of the problem could come down to how land agency UrbanGrowth NSW’s legal obligations are set.
The first in a series of principal objectives of UrbanGrowth set in the Landcom Corporation Act 2001 is: “to be a successful business and, to this end:
(i) to operate at least as efficiently as any comparable businesses, and
(ii) to maximise the net worth of the State’s investment in it”.
The word maximise means the body must get the most bang for buck to put back into government coffers.
So, for example, subsiding land sales to ensure developers include, say, 20 per cent affordable housing – like the City of Melbourne did this week – could be problematic.
Solar Citizens says there was “one sentence” holding back the transformation of our energy market.
In the case of UrbanGrowth it may be just one word holding it back from making a strong statement on housing affordability and leading by example – like they do in the UK or Canada.
Perhaps if we talked about “optimising” rather than “maximising” returns there would be a little more leeway for the body to deliver on the affordable housing outcomes demanded by our city, and to take into account wider economic benefits.
We know affordable, well-located housing for key workers has economic benefits in terms of access to jobs, so if the language around legally enshrined obligations could provide a little more flexibility, we could see some big changes.
The point is in times of rapid change, where increasingly radical solutions are needed, our governments must look carefully at how laws operate and whether they’re serving the greater good.
In these two cases it looks like they’re probably not.