A joint statement from The Australian Conservation Foundation, Friends of the Earth, GetUP!, Solar Citizens has slammed the Finkel review as a poor plan for a fast warming planet. Others find room for optimism.
The Australian Conservation Foundation, Friends of the Earth, GetUP!, Solar Citizens
Finkel set up for failure by climate deniers in Turnbull government
Chief Scientist Alan Finkel was given an impossible task: design an energy system that would tackle global warming but still keep Tony Abbott and the climate deniers happy.
The result of Finkel’s mission impossible is a clean energy target that is actually very, very dirty.
The most critical question is: will this blueprint actually reduce pollution in line with what’s required to halt dangerous global warming. The answer is no it won’t.
Polluting fuels like coal and gas are wrecking our climate, the Reef and endangering life. Any suggestion that coal or gas can be the future is just nonsense.
The science is clear – we need a zero-pollution power sector, as soon as possible. This report puts off the decision on how to do this for another three years. Climate science tells us there is no room for new coal and gas, and our Chief Scientist missed an opportunity to make that clear to the Turnbull government.
This is not a plan to make our power sector cleaner or our climate safer. It’s a short-term political fix to deal with the fact that the people who are apparently responsible for running the country have an ideological attachment to dirty fuels.
It’s clear the Coalition want to keep their coal-baron mates in business even if it wrecks the planet and drives up power prices. This report is designed to please them, not the 81 per cent of Australians who favour renewables over coal and gas.
Australia’s national energy market is broken and only a real plan to transition to real clean energy can fix it. This is not that plan.
We don’t need more politically-hamstrung reviews, we need action, we need change, based on the best science and technology we can muster.
We have no more time to waste on this.
The Climate Institute
The Finkel Review offers a valuable plan to improve our energy system, but governments need to recognise that weak climate policy would undermine the Finkel plan’s ability to deliver electricity that is cleaner, cheaper and more secure, said The Climate Institute today.
The Finkel review recommendations provide a comprehensive blueprint for a smoother energy transition. Recommendations include a Clean Energy Target, a mandatory three-year notice period for generators before they retire, and an emissions reduction pathway out to 2050.
“The Clean Energy Target can bring in cleaner energy and help reduce prices, but it’s not enough on its own,” said Olivia Kember, Acting CEO The Climate Institute.
“If the federal government sets up a Clean Energy Target, it should be combined with a strategy to make sure coal station retirements are predictable, manageable and consistent with our climate goals.”
The Finkel Review models a Clean Energy Target capable of reducing emissions in the electricity sector of 26-28 per cent by 2030, the same reduction as the government’s target for all national emissions. However, it notes that “it may be appropriate” for emissions reductions in electricity to be a greater percentage cut than the national target
“It’s absolutely clear that aiming for 28 per cent emissions reductions in electricity isn’t enough. For a start, reducing emissions in electricity is much easier than reducing emissions from agriculture and parts of industry, so the smart way to meet a national emissions reduction target is to make deeper emissions cuts in the power sector so that those other sectors have a bit of room,” said Kember.
“Secondly, under the Paris Agreement which Australia signed up to along with 195 other countries, the long-term goal is to limit temperature rise to 1.5-2°C,”said Kember. “That means net zero emissions by 2050, and so 28 per cent by 2030 just doesn’t take us far enough along the path to net zero”.
“And thirdly, investors know the goal is net zero so they recognise that anything less maintains a level of uncertainty that is unhelpful for efficient investment and lowest costs for consumers.”
The Climate Institute’s Switch in Time research showed that targeting 28 per cent emissions reductions in electricity used up over 90 per cent of a sectoral carbon budget consistent with the global 2°C goal. This meant that much more disruptive and drastic change was needed to reduce emissions after 2030.
“The Finkel plan gives us the ingredients for a successful energy transition .It’s now up to governments to respond with a policy package that keeps prices low and the lights on, and puts us on a path to net zero emissions.”
Environment Victoria response to elements of the Finkel Review
Environment Victoria Campaigns Manager Dr Nicholas Aberle said today:
“We welcome the Chief Scientist’s confirmation that under the Turnbull Government’s current policy settings there is no credible pathway to achieving Australia’s Paris climate commitments and consumers are paying more for energy.
“Frustratingly, the entire Finkel report is predicated on changing the energy market to reach the Coalition’s weak emissions targets of 26-28 per cent reductions by 2030, which are much weaker than Australia’s fair share of emissions reductions to limit global warming to less than 2 degrees.
“While the report is touted as major reform to our electricity market, the report’s suggestion that there will be no significant decrease in output from brown coal generators before 2030 is fanciful. Yallourn and the Loy Yang power stations are the dirtiest power stations in the country and can’t keep polluting indefinitely
On the recommendation that large generators provide three years notice prior to closure
“Expecting coal-burning power stations to voluntarily nominate their closure date 3 years in advance is wildly unrealistic. In the absence of a government plan for orderly retirement of coal power stations, generators have been reluctant to signal their intentions and give their competitors a leg-up and that’s unlikely to change.
“For the 10 coal-burning power stations that have closed in the past 7 years in Australia, communities and workers have had on average just 4 months’ notice from announcement of closure to finally turning off. The best solution to this problem is for government to outline a timetable of power station closure. This gives time to for affected communities to prepare for closure with government support, it maximises pollution reduction and it spreads closures across the National Electricity Market.
On the recommendation to have a non-binding register with long-term expected closure dates for large generators
“In February 2016, Hazelwood’s owners said the power station would run until 2032. Within 8 months, they were saying it would close in 2017. EnergyAustralia claims Yallourn will operate until 2032. AGL still says Loy Yang A could be operating in 2048. These claims are not worth the paper they’re written on.
“To pretend these ageing and polluting plants will operate that long is an insult to a community who needs to know when to start preparing. Governments need to set clear timelines for retiring all coal power stations – the biggest single source of climate pollution in the country.
On the recommendation to boost energy efficiency for low-income households
“We welcome the recommendation that COAG invest more effort into energy efficiency and demand management, with a particular focus on low-income households.
“For too long, regulators have focused only on the supply side while ignoring the cheaper and faster option of energy efficiency.
Our expectations for the Turnbull government
“Malcolm Turnbull went to an election with no plan to deal with climate change. With the Finkel review and the Coalition’s own climate policy review, the Turnbull government has a chance to start restoring their party’s damaged credentials on climate change. But their policy response needs to drive investment in renewable energy, set a timeline for retiring polluting coal and ensure Australia is showing real commitment to cutting emissions, not just doing the bare minimum in meeting their current weak targets.”
Total Environment Centre
Energy Regulators to be forced to consider climate change
Total Environment Centre today congratulated Australia’s Chief Scientist on adopting its recommendation to reinterpret the National Electricity Objective, to take account of emissions policy – despite the strong objections of the industry and rule maker.
“The Finkel Panel accepted TEC’’s proposal for the Australian Energy Market Commission (AEMC) to be given greater direction to consider decarbonisation of the electricity sector in making its decisions.”
In February TEC prepared a submission from 13 environmental groups and local government bodies to the Finkel review. It proposed reform of the NEO to give greater weight to decarbonisation policies and impacts. The central proposal was for the COAG Energy Council to issue a Statement of Policy Principles requiring regulators to issue ‘carbon impact statements’ with every major decision they make.
“Our submission made a clear and compelling case for how the energy market had suffered over the last decade from not internalising carbon costs and not facilitating decentralised and renewable energy generation, energy efficiency and demand management – all of which will benefit consumers”, said Mark Byrne.
The Finkel Report recommends that by mid-2018 the COAG Energy Council should provide:
a Statement of Policy Principles to the AEMC… to provide clearer policy guidance and clarity on the application of the NEO in the rule-making process…[T]his could include guidance to the AEMC on how issues of emissions reduction and environmental sustainability can be taken into account. [page 176]
“This would not involve a change to the National Electricity Law, which would have required the agreement of all state and territory energy ministers,” explained Mark Byrne.
“TEC looks forward to working with one or more state and territory governments over the next year to ensure that the AEMC is given clear direction; and that the AEMC moves fast, instead of the glacial processes of the past”
“Our climate and future generations require quick and decisive action.”
Energy Efficiency Council
Energy Efficiency Council has applauded the Finkel Review’s call for governments to move decisively to incentivise smart energy use with a ‘demand response mechanism’. However, the Council also warned that many previous reports have highlighted these opportunities with little result, and called for decisive, bipartisan action from governments to finally unlock these benefits for consumers and households.
The Finkel Review has recognised that consumers will have a central role in the move to a 21st century energy system.
Australia’s Chief Scientist, Dr Alan Finkel, has recommended a major ramp up in ‘demand response’ – working with consumers to voluntarily move their energy use from periods of high demand to times when supply is plentiful.
“This is a moment of truth,” said Luke Menzel, CEO of the Energy Efficiency Council, the peak body for energy efficiency and demand response experts. “We have been here before. Going as far back as the Parer Energy Market Review in 2002, multiple Energy White Papers, and other policy reviews have recommended incentivising customers to shift their demand in a way that benefits them, and the system overall.”
“However, as a nation we have repeatedly missed the chance to take this tool out of the toolbox, and use it to improve the security, affordability and reliability of our energy system.”
Demand response a missed opportunity
Demand response is common in energy markets around the world, but has long been underused in Australia’s National Energy Market (NEM) because the right structures and incentives for demand response haven’t been put in place.
In 2012 COAG endorsed a demand response mechanism (DRM) as part of an energy reform package. However, over the next four years the push for DRM lost momentum, in part because of a glacial and bureaucratic development process.
Experts believe that the wider availability of demand response could have helped prevent some of the system failures that have plagued the NEM in recent months.
Last month the Australian Energy Market Operator (AEMO) and the Australian Renewable Energy Agency (ARENA) announced a program to secure 100 megawatts of demand response capacity by next summer, which will improve system reliability in the event of extreme weather events or unplanned outages. However this is only a pilot, and is confined to Victoria and South Australia.
Time to act on demand response
“There is much to digest in this Review. But after everyone has had an opportunity for proper consideration, it will be important for energy ministers to act decisively to ensure consumers across the NEM can be rewarded for switching off power at peak periods,” said Menzel.
“Dr Finkel recommends a draft rule change that facilitates demand response in the wholesale energy market be put to COAG Energy Council by mid-2018. With so much work already done on this issue, it’s a very achievable deadline.”
“Let’s finally take this tool out of the toolbox, and put it to work to lower costs and improve system reliability.”
Green Building Council of Australia
The recommendations outlined in the Finkel Review demand bipartisan support, says the nation’s green building authority.
The Independent Review into the Future Security of the National Electricity Market has found a Clean Energy Target is the most effective mechanism to reduce emissions while supporting energy security and reliability.
Dr Finkel also recommends a system-wide grid plan to inform network investment decisions and ensure security, and a new Energy Security Board to drive implementation of the “energy blueprint”.
“The built environment is looking for consistent energy policy instead of a political football, which it has been for far too long. And the time to end this is now,” says the Green Building Council of Australia’s (GBCA) Chief Executive Officer, Romilly Madew.
“We face a huge challenge in Australia – to place downward pressure on electricity prices and ensure security of supply while we transition to a low-emissions future.
“We’ve made a commitment to the Paris Agreement, and that means reducing our emissions to limit global warming to well below 2?C. We cannot afford any more delays to policies and programs that will help deliver that goal.”
Under the blueprint outlined by Dr Finkel, the proposed Clean Energy Target would reduce electricity prices while requiring 42 per cent of power be generated from renewable sources by 2030.
“The proposed Clean Energy Target underscores why we must capitalise on the untapped opportunities within Australia’s built environment,” Ms Madew says.
“Buildings currently account for almost a quarter of our national emissions, but the Australian Sustainable Built Environment Council (ASBEC) has found that buildings can reach zero carbon by 2050, deliver healthier, more productive cities and save $20 billion using technologies that exist today.
“ASBEC’s Low Carbon, High Performance report has found that just five years of delay in implementing opportunities to reduce emissions in the buildings could lead to $24 billion in wasted energy costs,” Ms Madew adds.
The GBCA welcomes the blueprint’s focus on demand management, “because smarter energy use is the fastest, cheapest way to cut energy bills and reduce our environmental impact”.
The GBCA also welcomes the range of recommendations to support distributed energy resources, and Ms Madew says the GBCA “looks forward to working across government to establish a legislative and regulatory environment that supports more innovative energy generation solutions”.
Critically, the blueprint also establishes an accountability framework to support the ambitious recommendations.
“Annual public reporting to COAG on priorities and progress against a strategic energy plan will help build business and public confidence that the transition to a world class national electricity market is indeed in progress.”
“This Blueprint provides a roadmap towards a triple win: for consumers, business and the environment,” Ms Madew says.
“While the devil is undoubtedly in the detail, industry makes investments based on certainty. We need politicians to deliver on policies that last longer than the current political cycle.
“And that means getting behind the recommendations of the Finkel Review to deliver bipartisan energy policy for lower prices, a secure energy market and a sustainable and resilient future for current and future generations.”
The Property Council of Australia
The Chief Scientist, Alan Finkel has delivered the first comprehensive review into Australia’s energy market says the Property Council of Australia.
“This report isn’t light reading but it is compulsory reading – and it will take some time for industry to digest the full implications of the report”, said Ken Morrison, Chief Executive of the Property Council of Australia.
“No one, least of all governments and oppositions, should rush to rule in or rule out anything in relation to the Review. It is credible enough to warrant thoughtful discussion and review.
“For too long, there has been too much virtue signalling and not enough policy grunt in the energy policy space. This Review answers that.
“This is a credible and substantive blueprint for energy policy in Australia.
“The Australian electricity market and the economy have suffered because we have had no national consensus on energy policy. Continual uncertainty, ongoing partisanship, and an unwillingness of federal and state governments to mesh energy and climate change policies has increased costs, undermined investment, and increased risk.
“All of this has occurred during a time of tremendous change as renewable energy has grown, baseload power has been withdrawn, technology has changed, as has consumer demand.
“It has also been a time of unsettled policy and investors have stayed clear of investing in assets with long lead times given the potential for further energy policy changes.
“Energy policy has become the policy and political ‘Gordian knot’ of Australian politics and this report marks a major step towards undoing this knot.”
Mr Morrison said the Chief Scientist has proposed the development of a national economy-wide emissions reduction trajectory towards 2050.
“We recognise the opportunities that exist in the built environment to provide real efficiencies to the energy market and to help meet our Paris commitments, and we will study the recommendations of the Review to assess their effectiveness, cost and effect on the industry and the broader economy.
Mr Morrison said the Finkel Review recognised that much more needed to be done to deliver programmes that could drive energy efficiency. Pleasingly, the Review says:
“Despite these existing programs, a large number of submissions called for more to be done on energy efficiency and there appears to be considerable scope for greater use of energy efficiency to improve reliability, security and affordability.” (pg 155)
“We agree that the focus of government has been too narrow when it has come to driving energy efficiency. There are opportunities to drive energy efficiency across the built environment.
Mr Morrison said there is a compelling need for partisanship to be put aside in this debate given recent dramatic increases in electricity prices which are a direct consequence of an underinvestment in the sector and a lack of co-ordination and certainty in energy policy.
“Doing nothing is not a cost-free option. We must change the trajectory of energy policy in Australia, otherwise we will continue to see increased costs, low levels of investment and increasing reliability risks.”
“We will now consult with members across the industry as we develop our response to government on this Review.”
Lock the Gate reaction to Finkel Review: gas push threatens food security and water
Finkel Review criticism of government moratoriums on unconventional gas ignores observed evidence of the damage it inflicts on our food-producing land and local water resources and the unsustainably high cost of unconventional gas as a source of energy, says the Lock the Gate Alliance.
Naomi Hogan, spokesperson for Lock the Gate Alliance, “The Chief Scientist’s report acknowledges the high cost of gas-fired electricity and yet excludes consideration of the high cost of lost water and agricultural productivity from unconventional gas mining operations.
“Fracking for gas sacrifices our food security when our future energy security is best served by renewable energy with storage.
“State government moratoriums are in place because farmers, traditional owners and regional community groups have banded together to protect their land and water.
“Finkel cites the Government’s own principles that CSG must not inflict long term damage on water resources or compromise agricultural land for future generations. That’s exactly what’s at stake and precisely the reason why state governments have put restrictions in place.
“Forcing new gasfields onto Australian farmers is polluting, risky and leads to more expensive energy bills.
“Not only does unconventional gas mining, like coal seam gas mining, ruin farmland and
groundwater, it also impacts on agriculture by exacerbating climate change.
“The methane emissions caused by unconventional gas are grossly underestimated.
“Unconventional gas infrastructure leaks methane, a potent greenhouse gas, yet these emissions aren’t monitored or included in our national estimates of emissions.
“Already in Australia there could be tens of thousands of tonnes of raw methane being vented into the atmosphere from unconventional gasfields that have not been properly accounted for.
“Australia can have a reliable, affordable, sustainable energy future with renewable energy and innovative storage technology, which, unlike coal seam gas, do not sacrifice our farmland or climate.
Energy Networks Australia
The Finkel Review has delivered a Blueprint for a secure, affordable energy transition which deserves a disciplined implementation response by Governments and industry.
Energy Networks Australia CEO John Bradley said the 200 page Blueprint would require careful evaluation, followed by urgent implementation actions to stabilise Australia’s energy system.
“This Blueprint is the last, best hope that Australian energy customers have for a secure, reliable and affordable energy transition,” Mr Bradley said.
“The individual measures in the Blueprint need careful review but its greatest success would be compelling Australian governments to act together to lock down an agreed, national ‘Strategic Energy Plan’.”
Mr Bradley said bipartisan support for a Clean Energy Target recommended in the Blueprint could give much-needed certainty to investors and Australians confidence that emissions targets would be met.
“A well-designed, national Clean Energy Target would meet abatement outcomes without picking technology winners so that would mean lower costs to customers,” Mr Bradley said.
“To be successful, the Clean Energy Target needs an enduring, broad political commitment that lasts beyond the next election cycle.”
Mr Bradley welcomed proposals for an Energy Security Board to deliver the Blueprint and provide oversight, a system-wide Grid Plan, and regional security and reliability assessments.
“A transforming energy system needs strong well-resourced and proactive energy market institutions, with a shared plan of action and accountability for clear milestones,” Mr Bradley said.
“We welcome the Report’s emphasis on improved forecasting capabilities, cyber security and millions of small customers with solar, storage and other resources in an integrated grid.
“The Report recognises Electricity Network Transformation Roadmap analysis highlighting the potential to avoid $16 billion in future network spending by ‘orchestrating’ distributed energy resources.
“We also welcome the recommendations to remove arbitrary barriers to new gas supply development, with a focus on evidence-based environmental regulation.
“Australia can’t address electricity system security without removing arbitrary blockages to gas supply and ensuring gas markets are working effectively.”
Mr Bradley said Australian energy networks would provide every assistance to COAG Energy Council as it provides its implementation advice to COAG by August 2017.
Snowy Hydro Ltd
Snowy Hydro Limited welcomes the support of the Finkel Review of pumped hydro as a key to energy security as it focuses on recommendations aimed at strengthening reliability in the National Electricity Market.
Snowy Hydro CEO Paul Broad said the Snowy 2.0 project would play a key role in both ensuring security of supply and backing up the expected big increase in intermittent supplies – wind and power – in the market.
The report states on p33 that “Battery and pumped hydro storage will be able to support a reliable and secure NEM, as and when they are deployed at scale.”
Mr Broad said the Finkel Review had identified the need to guarantee back-up to any new intermittent power supply projects.
“Snowy 2.0 fulfils the objectives of the Finkel Review on energy security, in that it can uniquely provide the largest scale and affordable storage of renewable energy to support the reliable and secure power supply that is needed for Australia to move safely to a low emissions economy,” Mr Broad said.
“The Finkel review rightly points to the importance of pumped hydro as an essential back-up to intermittent wind and power to protect consumers and business, and ensure we don’t face the catastrophic supply failures that we have seen in South Australia.”
Snowy Hydro also supports market-based mechanisms to achieve the Government’s commitment to climate change targets, as well as stable and long term policy certainty. We will be actively engaging with relevant bodies to implement policies which best meet the energy trilemma of market efficiency, energy security and emission reductions.