Released last Friday, Dr. Alan Finkel's long-awaited Review of the National Energy Market represents an opportunity to provide national direction for crucial elements of our energy system.
One such necessity is Finkel's recommendation of a clean energy target. If bipartisan support can be obtained for a realistic clean energy target, the result can provide the market certainty that business has been demanding for some time.
Reliability of supply is another crucial area covered in the report. Finkel recommends that there be adequate backup for intermittent supply in the form of gas or storage.
He also recommends that large power stations which intend to close provide a notice of closure of at least three years to ensure replacement of supply.
Finkel also recommends that there should be a reserve of supply locked in a day ahead to ensure reliability.
To ensure greater security of energy supply, Finkel recommends that systems be put in place to prevent dangerous fluctuations in system supply.
Finkel also recommends that consumers be encouraged to reduce their demand at peak times. The review requires the development of “demand response schemes which will give consumers the incentive to smooth the load at peak time.”
To assist with the smooth running of the electricity market, it is proposed that there be established an Energy Security Board. The proposed board would be responsible for the implementation of the Finkel Review recommendations, as well as additional proposals when warranted.
The Finkel Report also recommends a review of the rules governing the electricity market. It proposes increased accountability for the market bodies involved through the development of more stringent performance indicators and a more rigorous process for the determination and monitoring of priorities for the energy sector.
As usual, the devil is in the detail, and some of the details have already caused howls of protest from both conservative climate-denying politicians who think Finkel has gone too far, and some at the other end of the spectrum who don't think he he has gone far enough.
Last year, Dr. Finkel addressed an audience at Charles Sturt University in Orange.
He told his attentive audience about how the Dutch transformed the carrot from a pale unattractive item to the succulent pleasantly coloured vegetable we all enjoy today.
Let us hope that Dr. Finkel, like the Dutch, has created from the unattractive vegetable that is the National Energy Market a “carrot” that is sufficiently attractive to enough of our national decision makers to ensure that its recommendations are adopted.
The Finkel report is not perfect, but at least it is a start.