Finkel Review of the National Electricity Market released
Australia’s Chief Scientist Dr Alan Finkel has unveiled a blueprint to optimise the National Electricity Market as a world-class electricity system that can serve current requirements and rise to the challenges of the future.
Dr Finkel presented the Final Report of the Independent Review into the Future Security of the National Electricity Market to COAG Leaders in Hobart on June 9th.
The blueprint will deliver four key benefits for the electricity system:
The report uses three pillars to achieve these outcomes: orderly transition measures, system planning and stronger governance.
Under the orderly transition pillar, the Review Panel concluded that a Clean Energy Target is the most effective mechanism to reduce emissions while supporting security and reliability.
Existing large electricity generators will be required to give a three years’ notice of closure. This will signal investment opportunities for new generation and give communities time to adjust to the loss of a large employer.
The transition would be underpinned by agreement from Australian, State and Territory governments to a national emissions reduction trajectory.
During the transition, the report recommends that security be achieved through obligations on new generators to provide essential services to maintain voltage and frequency. Further, new generators will be required to guarantee supply of electricity when needed at a level determined following regional assessments by the market operator.
The second pillar of the blueprint, system planning, recommends a system-wide grid plan to inform network investment decisions and ensure security is preserved in each region. This would also include a list of potential priority projects to enable development of renewable energy zones.
The third pillar of stronger governance calls for a new Energy Security Board to drive implementation of the blueprint and deliver an annual health check on the state of the electricity system.
The full report can be accessed at https://www.environment.gov.au/energy/publications/electricity-market-final-report