COAG: Finkel reforms to be actioned immediately

retail energy

The COAG Energy Council has today agreed to a significant set of reforms that will deliver a more affordable and reliable electricity system.

The meeting, held today in Brisbane, saw the Energy Council agree to immediately act on 49 of 50 recommendations handed down in the Independent Review into the Future Security of the National Electricity Market (NEM).

“Following the eight-month review led by Australia’s chief scientist Dr Alan Finkel, these significant reforms have been agreed to in record time and will help to drive down power prices and ensure we have a more reliable system well into the future,” Federal Energy Minister Josh Frydenberg said.

The key recommendations the council agreed on include:

  • a new Generator Reliability Obligation which will require intermittent sources of generation to provide an appropriate level of backup to guard against blackouts;
  • the introduction of Energy Security Obligations to provide the necessary support services (Frequency Control and Ancillary Services and inertia) to intermittent sources of generation;
  • a new requirement for large generators to give a minimum three years notice before closing; and
  • the establishment of an Energy Security Board to oversee the health, security and reliability of the NEM.

The only recommendation that has not yet received action from the government is the clean energy target (CET), which was recommended in the report as the most effective mechanism to stabilise the country’s energy system.

At them meeting, the Australian Energy Market Operator (AEMO) outlined their comprehensive plan for this summer.

“As part of this plan the market operator will be able to contract for more supply to make sure there is no shortfall,” Mr Frydenberg said.

“Following an update from the Australian Competition and Consumer Commission (ACCC) on its review into retail electricity prices the Energy Council agreed to provide greater transparency on the price and availability of long-term electricity retail contracts as well as to give consumers greater real time control over their energy consumption.

“Importantly governments will be provided with greater visibility of retail electricity prices, retail margins and factors affecting price to ensure they are in a stronger position to respond to any inappropriate market practices.”