Finkel review: 49 of 50 recommendations supported

The Federal Government has agreed with 49 of chief scientist Alan Finkel’s 50 recommendations delivered in the Final Report of the Independent Review into the Future Security of the National Electricity Market.

It is yet to agree on the Clean Energy Target recommended in the report as the most effective mechanism to stabilise the country’s energy system.

The CET has sparked debate among politicians regarding whether it would lead to new coal-fired power stations.

Speaking at the National Press Club this week, Mr Finkel said the review was not about coal.

“As an engineer, I am actually not too fussed what the mix of (power generation) is to achieve those outcomes as long as all of them are plausible players and contributors to the achievement of that outcome.”

He confirmed this point the following day when addressing delegates at Australian Energy Week in Melbourne.

“There’s two types of people in this world – those that want to kill coal and those that want to build more coal,” he said.

“And I might be the only person on the planet that doesn’t care.”

Mr Finkel said the review takes the position that reliability, security, lowest cost, and reduced atmospheric emissions are the critically important outcomes.

“The generation mix is an input. The exact mix of coal, gas, solar, wind and hydro is not important as long as the outcomes are met,” he said.

“To minimise future price increases we will need a diverse energy mix, including fossil fuels.

“Our modelled emissions reduction pathway is not a dash for 2030.

“Instead, it is a continuous trajectory in the electricity sector that reduces steadily towards zero in the second half of the century, consistent with the Paris commitments for the whole of the economy.”

Under the proposed CET, there would be 42 per cent renewable energy generation in 2030.

“The greatest proportion of that will be large scale solar and wind at 24 per cent, up from 17 per cent in a business as usual scenario,” Mr Finkel told National Press Club.

“In addition, eight per cent comes from hydro, nine per cent from rooftop solar and one per cent from biomass.

“This renewable energy will operate alongside existing coal generators.
“These coal generators will supply 53 per cent of our electrical energy in 2030. This is four per cent less than under business as usual.

“In 2050, our modelling shows coal will persist at a higher level than under business as usual.

“The reason is that with policy certainty, the owners invest in major refurbishments, thereby preserving the existing coal generation to achieve emissions reductions at lowest cost.”

Mr Finkel concluded his speech with a quote from Giuseppe di Lampedusa’s novel, the Leopard: “everything must change so that everything can stay the same.”

“So, too, if we want to preserve the NEM as a stable and affordable electricity system, we have to proactively respond to inevitable change,” he said.