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Powering the Future: the 3 Winners from the Finkel Review into the National Electricity Market

  • Finkel Review commissioned to combat Australia's energy crisis
  • Renewable energy will dominate the future of Australia's electricity supply
  • The big winners from the Finkel Review are wind and solar power

I recently reviewed the findings from The Independent Review into the Future Security of the National Electricity Market – Blueprint for the Future. Renewable energy will be the driver of future electricity production in Australia.

Australia is grappling with an energy crisis caused by a combination of growing demand, extreme weather incidents and a shortfall in electricity supply (due in part to the closure of the ageing Hazelwood and Port Augusta coal plants). The effects of the energy crisis were most clearly evident in early 2017 when the entire state of South Australia experienced a power blackout. Other issues with Australia’s energy supply that need to be addressed include soaring prices, a gas shortage, declining reliability and climate change.

The Independent Review into the Future Security of the National Electricity Market – Blueprint for the Future (“the Finkel Review”) was presented by Alan Finkel, Australia’s Chief Scientist, to the Council of Australian Governments (COAG) Leaders’ meeting on 9 June 2017. The Finkel Review was commissioned to recommend reforms to Australia’s electricity system to combat Australia’s growing energy crisis.

The Finkel Review contained 50 recommendations for federal government, the most significant of which was the implementation of a ‘Clean Energy Target’ (CET). This would involve the setting of an emissions intensity threshold – a measure of the amount of carbon emissions emitted per electricity unit generated. Electricity generators would need to ensure that the level of CO2 pollution emitted was below the threshold. Such a threshold would see fossil fuel-based energy, such as coal (including High Efficiency Low Emissions (HELE) - so-called ‘clean coal’) on the way out, being replaced by renewable energy that generates no or negligible carbon emissions.

The Finkel Review therefore advocates a clean energy future for Australia. The benefits would include energy reliability, affordable electricity and a reduction in greenhouse gas emissions. Renewable energy is touted as the driver of future electricity production. The 3 winners out of the Finkel Review are:

In 3rd place: Rooftop Photovoltaic (solar power) – a type of ‘distributed energy resource’ because it involves the installation by building owners of solar cells on their rooftops, to generate their own electricity – expected to generate 11% of electricity in the National Electricity Market by 2050.

In 2nd place: Solar Photovoltaic (solar power) – this refers to larger scale solar panel farms – expected to generate 18% of electricity in the National Electricity Market by 2050 assuming a CET.

And in 1st place: Wind power – large scale wind energy in the form of wind farms is seen as pivotal to the future of power generation – expected to generate 35% of electricity in the National Electricity Market by 2050 assuming a CET. Wind energy will be the main source of power for Australia.

Conclusion

 

The future of Australia’s electricity supply will be shaped by renewable energy, in particular solar and wind energy.