Finkel is coming
Will this be our winter of discontent over the future of electricity in Australia?
I am sure the august work of The Independent Review Into the Future Security of the National Electricity Market will give some direction into the future of the NEM.
The National Electricity Market (NEM) is the longest geographically connected power system in the world, supplying the states and territories of eastern and southern Australia – Queensland, New South Wales, the Australian Capital Territory, Victoria, South Australia and Tasmania. It generates around 80 per cent of Australia’s electricity consumption.
Once in a generation opportunity
The NEM was indeed built in times requiring less complexity in our energy supply and this is indeed a once in a generation opportunity to reform the way we provide this currency of our lifestyle and industry. Until the next time we do this if we don't get it right this time, that is.
Security, Reliability and Affordability
That's what we need, enough said. Or is it? The environmental dimension doesn't seem to get a guernsey, check the word cloud I made above. But all is not lost. The emerging realisation (in Australian politics) is that renewable energy makes good economic sense. Simply put it is cheaper and the fuel is free.
Above all, Consistent Policy Settings
Some consistent policy settings are desperately needed and this requires a healthy dose of bipartisan support. The question and challenge is this, can we rise above political point scoring and act in the interests of Australia? Or are we doomed to the mediocrity of the least worst option that seems to be the dominant political model?
First Serve - LET
A Low Emission Target (LET) has been foreshadowed, warming up the punters to what may be an outcome that the current government can live with. There is so much commentary, mostly against, one gets the feeling we are heading for a sub-optimal outcome.
Markets are betting on a renewables led electricity price reduction, but not this year or next. If you are a business and haven't got the bad news on upcoming price rises, hold on to your hat. I have seen examples of from 50 to 400% rises in business energy supply agreements. The Finkel report has a key role to play in stabilising electricity supply and prices in the medium term.
Let us see what the second serve this Friday yields.