Australia’s Finkel Review recommends energy security obligations for renewables

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on reddit
Reddit
Share on email
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:

  • 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

PV Tech Premium
May 12, 2021
After the International Energy Agency revised its renewables deployment forecast upwards by 25%, Liam Stoker looks at the difficult nature of forecasting a rapidly maturing sector amidst a changing landscape
May 11, 2021
The clean energy council has slammed the Australian government’s latest federal budget as “disappointing” for not placing more onus on expanding the country’s renewable energy capacity.
May 10, 2021
Novel technology is to be deployed by National Grid Electricity Transmission (NGET) in a bid to open up around 1.5GW of capacity for renewables.
May 5, 2021
The Australian Renewable Energy Agency (ARENA) has selected three commercial-scale green hydrogen projects that will share in AU$103 million (US$79.7 million) of funding to support their development.
May 4, 2021
Canada-based renewables company Amp Energy will a develop portfolio of large-scale PV projects and battery energy storage systems as part of an AU$2 billion (US$1.55 billion) hub in South Australia.
April 21, 2021
Australia’s airports have untapped potential to aid the country’s transition to renewable energy, according to a report from researchers at Melbourne’s RMIT University.

Subscribe to Newsletter

Upcoming Events

Upcoming Webinars
May 26, 2021
Session 1 - 7:00 AM (BST) | Session 2 - 5:00 PM (BST)
Solar Media Events
June 15, 2021
Solar Media Events
July 6, 2021
Solar Media Events
August 24, 2021