Finkel Review A blue print for Australia s energy future

Finkel Review: A blue print for Australia’s energy futureThe first comprehensive review into Australia’s energy market will take time to digest, but is a credible and substantive blueprint for energy policy, says the Property Council’s chief executive Ken Morrison.Australia’s Chief Scientist, Dr Alan Finkel, delivered his ‘blueprint for the future’ of Australia’s national energy market last week, making recommendations on four key outcomes: energy security; future reliability; affordability for households and business; and emissions reductions.”The national electricity market is 5,000 kilometres long, spans fives states and one territory and has more than nine million metred customers. It’s essential that we get it right,” Finkel said at the report’s launch.Property Council chief executive Ken Morrison says it will take time for the industry to digest the full implications of the 200-page report.”This is a credible and substantive blueprint for energy policy in Australia,” Morrison says, and “no one, least of all governments and oppositions, should rush to rule in or rule out anything until it has been dissected and debated”.The report’s recommendations have been widely welcomed by business, industry and consumer groups. Innes Willox, chief executive of Ai Group, which represents around 600,000 businesses nationally, says the report is a “desperately needed opportunity to overcome the divisions and short-term thinking”.Energy Networks Australia, the peak body representing gas and electricity transmission and distribution businesses argues the blueprint is the “last, best hope” for Australian energy customers, while the Climate Institute says the review offers a “valuable plan”, provided the federal government backs it up with a strong commitment to climate action.Among the recommendations, Finkel has proposed a Clean Energy Target (CET), in line with Australia’s commitments under the Paris Accord. A CET is similar in principle to a Renewable Energy Target (RET) but is technology agnostic and compels electricity retailers to buy a set amount of power from low emission generators.The Clean Energy Council has said a CET could provide “much-needed long-term confidence to investors in new clean energy projects”. A CET would still push up energy prices for end consumers, because retailers are likely to pass on the cost of their certificate obligations, the report finds. However, modelling concludes that price increases would be less than prices under business-as-usual policy because of the current lack of investment certainty in the system.The report also recognises the potential of energy efficiency to improve reliability, security and affordability, and Finkel recommends governments accelerate work in this area.Chief executive officer of the Green Building Council of Australia Romilly Madew says the focus on demand management is important, “because smarter energy use is the fastest, cheapest way to cut energy bills and reduce our environmental impact”.Other measures include greater transparency and consumer awareness, a system-wide grid plan and incentives for distributed generation.Minister for the environment and energy, Josh Frydenberg, says the Turnbull Government will now “carefully consider” Finkel’s recommendations.Morrison says the Property Council will be working with expert member representatives over the coming weeks to digest the report in full and make recommendations on the design of key policy instruments recommended in the report.But he stresses that partisanship must be put aside.”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.”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.”