Australia’s Finkel Review recommends energy security obligations for renewables

June 9, 2017
Facebook
Twitter
LinkedIn
Reddit
Email
Credit: ARENA

Australia’s chief scientist Dr Alan Finkel has delivered his major energy review to the government recommending various changes that will impact the solar PV sector.

The Australian Solar Council picked out three key proposals:

This article requires Premium SubscriptionBasic (FREE) Subscription

Try Premium for just $1

  • Full premium access for the first month at only $1
  • Converts to an annual rate after 30 days unless cancelled
  • Cancel anytime during the trial period

Premium Benefits

  • Expert industry analysis and interviews
  • Digital access to PV Tech Power journal
  • Exclusive event discounts

Or get the full Premium subscription right away

Or continue reading this article for free

  • Introducing a Clean Energy Target (CET) to replace the Renewable Energy Target (RET) after 2020
  • Implementing Energy Security Obligations for new large-scale renewable energy projects
  • Mandating three-year advance notice for closure of coal-fired power stations

The CET mechanism would provide incentives to encourage new generators into the market to ensure electricity demand is met. Although Finkel said the focus is on incentivising low emissions generation, the policy would not include penalising high emissions technology. Moreover, as long as it fits with as the emissions reduction trajectory, even coal-fired generation would be incentivised if mixed with wind and solar.

This caveat led to campaign group Solar Citizens branding the review the “Finkel Flop”, claiming that the recommendations are bad news for wind and solar.

On the other hand Clean Energy Council chief executive Kane Thornton was more positive, stating: “Dr Finkel’s proposal for a Clean Energy Target could provide much needed long-term confidence to investors in new clean energy projects, bringing on new power supply that can lower power prices and ensure energy security as old coal-fired power stations continue to close.”

Indeed, Finkel noted several times the stress that the National Electricity Market (NEM) is under. He cited increased penetration of variable sources of energy (wind and solar) as a major issue for the grid, while also highlighting the troubles caused by the sudden closure of the giant Hazelwood coal plant earlier this year.

In fact, it was the Hazelwood closure that prompted one of Finkel’s key proposals – a requirement for all large generators to provide at least three years’ notice prior to closure.

Security obligation

Another proposals likely to be financially burdensome to solar and energy storage developers was the introduction of Energy Security Obligations for new large-scale renewable energy projects.

All new generators connecting to the National Electricity Market would have to meet “strict” technical requirements to contribute to fast frequency response and system strength. Renewable plants could partner with other forms of generation such as storage to meet these requirements.

The policy was again underpinned by the need to power system security in Australia, with Finkel again claiming: “Security and reliability have been compromised by poorly integrated variable renewable electricity generators, including wind and solar. This has coincided with the unplanned withdrawal of older coal and gas-fired generators.”

Rooftop

Rooftop solar and storage consumers should be rewarded for shifting electricity usage to off-peak times, said the review.

However, Finkel said the Australian Energy Market Operator (AEMO) currently lacks visibility of distributed energy resources, which is compromising its power system management. Australia already has one of the highest penetrations of rooftop solar in the world.

Finkel Review said: “The electricity system was not originally designed to accommodate millions of distributed energy resources (DER) such as rooftop solar photovoltaic and battery storage systems. CSIRO and Energy Networks Australia estimate that 30 to 45% of annual electricity consumption could be supplied from consumer-owned generators by 2050.”

Of course the Finkel Review contained a large number of other key proposals not covered in this article.

Read Next

October 15, 2025
The Australian government has approved the 141MW Forbes Solar Farm Project in New South Wales in just 19 days, marking one of the fastest environmental approvals on record in the country.
October 15, 2025
Australia has opened registrations for Capacity Investment Scheme (CIS) Tender 7, which targets 5GW of renewable energy generation capacity across the National Electricity Market (NEM).
October 10, 2025
Australia's renewable energy sector recorded its slowest month of the year for additions in September, with 5.8GW of new projects added to development pipelines, according to data from Rystad Energy.
October 9, 2025
The Australian government has announced the results of the fourth Capacity Investment Scheme (CIS) tender, with 6.6GW of renewables awarded long-term contracts.
October 8, 2025
The NSW Independent Planning Commission has granted planning approval for Potentia Energy's 500MW Tallawang solar-plus-storage project.
Premium
October 8, 2025
PV Talk: Smart Energy Council's Nigel Morris reflects on how Australia has become a global testbed for distributed solar and storage innovation.

Subscribe to Newsletter

Upcoming Events

Solar Media Events
October 21, 2025
New York, USA
Solar Media Events
November 25, 2025
Warsaw, Poland
Solar Media Events
December 2, 2025
Málaga, Spain
Solar Media Events
February 3, 2026
London, UK