Don’t lose an opportunity for integrating energy and climate change policy
Submitted to the Energy Security Board, Thursday 1 March
The Energy Security Board’s approach to the National Energy Guarantee could deliver the integrated energy and climate policy that Australia needs. In this submission to the ESB’s consultation paper on the Guarantee, Grattan’s Tony Wood, David Blowers and Kate Griffiths say the emissions requirement should be flexible to alternative political choices on the end target. The ESB will need to determine whether the reliability requirement is addressing investment, deployment, or both, and clarify the role of the Australian Energy Market Operator. Other design choices flow from these decisions. We recommend that the Guarantee provide a long-term signal to encourage investment and ex-post compliance, to strengthen the incentive to deploy during critical periods. The consequences of design choices should be made clear to the COAG Energy Council, so that federal and state energy ministers can make fully-informed decisions.