Energy meet calls for policy action

John Pierce, chairman of the Australian Energy Market Commission

John Pierce, chairman of the Australian Energy Market Commission

Hot on the heels of the change in Prime Ministerial leadership, energy industry heavyweights gathered yesterday to debate one of the most pivotal policy issues facing the new administration.

Australia’s lacking energy policy was at the top of the agenda at this year’s Eastern Australian Energy Markets Outlook (EAEMO) in Sydney.

Opening the two-day event, ex-chairman of the Australian Petroleum Production and Exploration Association (APPEA), owner of Coolibah Consulting and industry commentator Keith Orchison issued a clear message to industry and the new PM, Malcolm Turnbull.

“The interesting events of the past three days in a very real sense, change nothing,” Mr Orchison said.

“All the existing issues are still the issues and they are going to take a great deal more than a change in the Prime Ministership to resolve.”

“One of the opportunities that comes from a conference such as this, as the new administration settles in, is to revise and reiterate the concerns that both the supply industry and the consumers have got. The over-riding concerns is will we get a firmer sense of direction and a firmer commitment to cementing a change program.”

Mr Orchison’s preamble to the EAEMO echoed throughout the first day’s session.

Jeff Dimery, CEO of Alinta Energy called on both state and federal levels of government to look to South Australia as a “test pond” and a forerunner for what will occur nationally if policy does not catch up with evolution in the energy sector.

“We have all these wonderful policies and people on both sides of politics can claim what emissions targets they want to set, what renewable penetration they want in the market … but what they can’t tell you is how the market should be designed to cope with that. They haven’t looked at market design,” he said.

Alinta Energy in June announced it was shutting down its two Port August coal fired power plants amid some four years of negative cash flows brought on by the rapid uptake of renewables in South Australia and a glut in domestic power supply.

South Australia is by far the world leader on domestic renewable take-up rates, according to figures presented yesterday by the Matthew Warren, chief executive of the Energy Supply Association of Australia.

Peter McIntyre, managing director of TransGrid rallied the call for a better policy environment to help guide power supply firms to 2040 and beyond.

“One of the things I am very conscious of is the lack of any long term energy policy for this country,” he said.

“There are papers and there are white papers, and there are green papers and there are policy announcements, but none of them really turn their mind in any sensible way to the issue of what the energy source of Australia is going to look like in say, 2040 or 2050.”

Unanswered questions for the government from yesterday’s speakers were clear: How will the Australia’s energy mix look in 30 years time? Will there be an effort to substitute oil for gas, and then renewables? And who will pay for it; the industry or the consumer?

John Pierce chairman of Australian Energy Market Commission said while it is possible to achieve a balanced and long-term road map that is both sensitive to the environment and responds to Australia’s energy demands.

“We talk about the need for integration of climate change and energy policy. But what we are really speaking is getting out of a world where traditional energy objectives have been seen as the most important, and that it trump climate change policy objectives, to now a dynamic where climate change policies are now seen as more important and trump basic energy policy objectives,” he said.

“And to me that is one of the major sources of the confusion and drive the outcomes that some are concerned about.

“It is actually possible to come up with policy instruments that can achieve the both sets of objectives at the same time and in a consistent fashion and can give the people the confidence that they are going to endure something for longer than just one election cycle.”

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