PERTH (miningweekly.com) – The Australian Petroleum Production & Exploration Association (Appea) has welcomed the release of the final report of the independent review into the Future Security of the National Electricity Market.
Australia’s Chief Scientist, Dr Alan Finkel, on Friday unveiled a blueprint to optimise the national electricity market to deliver four key benefits, including future reliability, increased security, rewarding customers and lower emissions.
“Our electricity system is entering an era where it must deal with changing priorities and evolving technologies. If the world around us is changing, we have to change with it. More of the same is not an option, we need to aim higher,” Finkel said.
“If we adopt a strategic approach, we will have fewer local and regional problems, and can ensure that consumers pay the lowest possible prices over the long term.
“The blueprint released today presents the essential elements for a strategic plan for our electricity future. It is up to federal, state and territory governments to take these recommendations, make decisions, add detail and drive it forward.”
One of the findings of the report was that gas would play an essential role in providing secure and reliable electricity for Australians, with Finkel urging state and territory governments to work with communities to encourage safe exploration and production of gas.
Appea CEO Dr Malcolm Roberts said the review’s recommendations, including a Clean Energy Target and the removal of blanket bans and moratoriums on gas development, could be a solution to the current climate policy impasse and place downward pressure on energy prices.
“While the gas industry prefers an economy-wide market mechanism, a Clean Energy Target could reduce emissions from electricity generation,” Roberts said.
“To work, a target must be realistically ambitious – set at a level that winds back our dependence on coal-fired generation without jeopardising energy security.
“The best option today to cut emissions is to use more gas-fired power generation. As the review confirms, gas can complement the intermittent nature of renewable power generation and produce electricity with one-third to one-half lower emissions than coal.
“Instead, we are seeing gas-fired generation squeezed out of the mix by cheap coal and subsidised renewables. Along with policies to remove barriers to gas development, a Clean Energy Target could help reverse the trend of gas disappearing from the energy mix.”
Roberts said the industry welcomed the review’s recommendation that governments should avoid blanket restrictions and bans on gas projects and instead encourage the safe exploration and development of the industry by adopting evidence based regulatory regimes to manage risk on a case-by-case basis.
“The Finkel review should result in the immediate removal of all moratoriums and bans on natural gas development,” he said.
“Australia must expand its use of gas over the next decade if it is to achieve a least-cost and secure transition to lower emissions. That will not be possible if states persist with political bans and restrictions on gas projects.
“Every effort must be made to encourage exploration and development. Policies that discourage investment in new gas projects must be junked. Australia has enough gas to support our domestic and export needs for hundreds of years. We just need the political will to develop it.”
The Minerals Council of Australia (MCA) said that the review's most important contribution was its support for a technology neutral approach to energy markets.
"This is a welcome shift from federal and state government energy policy settings which have exclusively favoured intermittent energy sources with adverse consequences for reliability and price," said MCA CEO Brendan Pearson.
However, he added that the sector was disappointed that the review's support for technology neutrality did not include a recommendation to remove the prohibitions on nuclear energy, a technology which currently provides zero emissions baseload energy to countries with a combined population of 4.5-billion people.
The MCA has, meanwhile, welcomed the concept Generator Reliability Obligations and Energy Security Obligations, saying these could provide an important means of ensuring that new generation can provide reliable and secure power.