Even if there isn’t a Clean Energy Target (CET) policy of any sort, decisions will still be made by investors, there’s a lot of different ways to skin this particular cat, Independent Review into the Future Security of the NEM Panel Member, Chloe Munro said at the CEDA Victoria energy event.
“Consumers are taking all sorts of action if they can afford to,” she said.
“They’re investing in more efficient devices, they’re beginning to engage in demand-side management options that are being offered.
“So, it’s not that we won’t make progress, we definitely will but there will be rocks along the road and I think we’d all like to avoid those.”
Ms Munro said the CET is about putting up guardrails for the energy markets.
“Our concept was that you’d have an overarching plan of where you were trying to head and then you put in some guardrails,” she said.
“And the guardrails are essentially regulatory measures, but they’re there to make sure that as you go down this transition you stay within safe operating parameters that don’t cause too much stress and disruption.
“And then within that once you’ve got those guardrails in place, a competitive market – an innovative market – has the full opportunity to deliver new approaches to that and deliver those outcomes for customers benefit at least cost.”
AGL CEO, Andy Vesey said he’s been trying to figure out why we’re suffering so much with the CET because it seems to make sense.
“And when things that make sense don’t seem to work out you have to try to think through what you’re missing,” he said.
“I’ve been hearing recently a lot of people talking about the CET as a renewable subsidy, which it’s not necessarily, it’s a transition mechanism.”
Mr Vesey said the transition is not to be thought of as moving from dirty coal to clean renewables but as a transition from an old system to whatever is next.
“It’s about making sure we don’t have a gap between the transition, as the old plants close down and the new ones get built,” he said.
“The chances are that the things that will be built at the new plants will be some type of renewable technology firmed up by either gas or batteries or pump storage.
“That presents a few challenges in our energy only market, that’s the gap and that’s a transition that we have to deal with.”
Mr Vesey didn’t give an alternative when asked what should be put in place if a CET policy wasn’t adopted.
“All I can tell you is that the market can’t wait patiently by because really bad things will happen,” he said.
“There are a number of things we can do today to help relieve the pressure on prices but fundamentally until we have more energy in the market from new investment those price levels don’t come down.
“We can continue to think this is an issue or a challenge that’s 10 to 20 years out but it’s not, it’s a problem today.”
Clean Energy Council Chair, Rachel Watson said the CET is needed if that’s the best way of delivering investment certainty.
“We also need it to be well designed and well thought-out and it feels to me like we’re wasting time at the moment – when we could be working on the actual practicalities of how we’re going to implement this and what it’s going to look like – by debating whether we should have one at all,” she said.
“It seems to be a very one-sided debate, the majority is very clear with their view but it seems we’re now at risk of the minority having their way.”
Ms Watson said there’s a huge amount of innovation going on in the energy market.
“A big part of it is coming through the renewable sector as well and it feels to me like we’re putting some of that at risk the longer that we allow this uncertainty to continue and that would be an enormous shame,” she said.
“We need to get a solid market basis set and then that will provide the environment for all sorts of technology and innovation to flourish and grow on top of that.”