Pacific Hydro calls for complementary energy policy reform

27 March 2012

Pacific Hydro, in a submission on the Draft Energy White Paper has called for a complementary reform package in energy policy and regulation that will ensure that the long term goals to transform the stationary energy sector to clean, renewable energy will be achieved.

“To be a true driver of complementary reform, the Energy White Paper must recognise the significance of the clean energy future policy objectives and the 20% renewable energy target on the energy industry,” said Lane Crockett, General Manager Australia

“There needs to be a clear link to the Clean Energy Future policy and real reform in the energy market to drive efficient investment for the clean energy transition,” he said.

“At a fundamental level, we need to ensure that the long term goals of the emissions reduction policy are backed by the efficient operation of the energy market,” said Mr Crockett.

Pacific Hydro also states that there must be recognition of the fundamental link between climate change policy and the energy market via the Renewable Energy Target and the Clean Energy Future legislation.

“The National Electricity Objective (NEO) does not acknowledge the climate policy agenda, creating a divergence between energy market investment signals and the need to deliver on climate change and emissions reduction outcomes,” said Mr Crockett.

This manifests as one of the most significant barriers to efficient transformation of the energy sector as it impedes regulators and energy market institutions from having regard to the low carbon energy directions in the RET and Clean Energy Future package.

“The Government has an opportunity, through the Energy White Paper, to recognise and recommend that this vital policy link is addressed through policy consistency and complementary regulatory reform for the energy market as a whole, said Mr Crockett.

Pacific Hydro also noted that the least cost renewable energy technologies provide a clear opportunity to guard against rising fossil fuel costs, as the clean energy industry benefits from global expansion.

The cost of electricity from wind turbines is predicted to drop 12% in the next five years, according to research from Bloomberg New Energy Finance.

Solar manufacturing is also seeing significant competitive price pressure and increases in demand driving prices for flat plate panels lower.

“The positive impacts of the RET are now visible in the South Australian energy market, with more than 20% of the state’s energy provided by wind power, with no impact grid stability or security of supply and no requirement for back-up power plants to be installed. ,” said Mr Crockett.

“The Energy White Paper has a clear opportunity to provide a long term and strategic policy environment which will ensure that investments in the energy market underpin Australia’s transition to a low emission future. We hope that Government will use this to provide clear signals on grid, upgrades and expansion which are set to become a major barrier to  the long term, clean energy goals for Australia,” finished Mr Crockett.