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Energy market plan calls for major reform | Canberra weather

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Coal and gas-fired power plants could receive payments to stay alive in a bid to avoid soaring energy prices as part of a national plan to reform Australia’s electricity market. The Energy Security Board provided final advice to federal and state ministers on the future of the energy market after 2025. As part of its recommendations, incentives would be provided to conserve existing power generation as well. longer than necessary to maintain system reliability. and affordable. The “capacity mechanism” would be designed to maintain the reliability of the electricity grid while the system switches to renewables. This would increase the proportion of wind and solar power over time, alongside investments in batteries and hydraulic pumps, to ensure an orderly shift away from coal. But investors in renewables warn that paying fossil fuel producers to stay in business could have a chilling effect on new supplies. An open letter signed by the Australia Institute called for support for battery storage and pumped hydroelectricity instead of giving “financial deals to old, inflexible and polluting generators.” The ESB has promised to work with industry players and governments on the appearance of the mechanism. It also highlights a reform path to better integrate distributed energy resources such as solar energy on rooftops. “There are a number of policy choices in the design of a capacity mechanism, as outlined in this opinion, which must be taken into account to ensure that the recommended design is both effective and efficient,” the report said. “Beyond 2025, the types of resources that should be best incentivized by a certificate system are flexible, reliable and economically competitive resources when operating at low capacity factors.” Federal Energy Minister Angus Taylor said preventing distributable generators from shutting down too soon would prevent prices from spiking. “Acting now is critical and we need a coordinated approach to market design to keep the lights on and costs low,” he said. Mr Taylor added that this would avoid price hikes similar to the closure of the Hazelwood coal-fired power plant in Victoria in 2017. Although there was a record investment in renewable capacity with 7,000 megawatts added l last year, the minister said that there was still not enough capacity to ensure an affordable and network. “This is a significant concern, with the large-scale replacement of thermal generators needed over the next decade and beyond as older power plants exit the market,” he said. . Energy ministers will meet in September to agree on the final reform package that will be presented to the national cabinet in October. Associated Australian Press

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