Energy ministers agree on 'capacity mechanism'
Following a meeting of energy ministers in Brisbane today, the federal energy and climate change minister, Chris Bowen, announced a deal on a "capacity mechanism" which he said would "turn on the light".
Bowens said:
The capacity mechanism, which we will implement in partnership with states and territories, will look at the commonwealth call option, for bids, for specific renewables to be underwritten by the commonwealth going forward.
This is a sensible and carefully designed mechanism that will unleash investment in clean energy that can be shipped directly across Australia. This will strengthen our network, providing extra capacity as more power plants leave the grid, as more coal-fired power plants close, we will strengthen the network going forward. As we know, in the last decade four megawatts of energy left the system and only one entered.
He said there would be more detailed discussions on design elements but today was a big step forward.
I was delighted by the conversations we had around the table, delighted by the support from state and territory colleagues as always. This is one team working together to get the job done.
The capacity plan will generate $10 billion of new clean energy, Bowen said
As we noted, energy ministers have agreed on a capacity investment scheme that will drive as much as $10 billion of investment into “renewable renewable delivery capacity” for the power grid.
Critics have sought to deride the intermittency of wind and solar energy as meaning that they are inherently less reliable than "baseload" (when the latter is undamaged) coal- and gas-fired power plants.
However, under this new arrangement, the Commonwealth will open tenders for projects that add storage and even new-generation projects themselves. There will be an agreed minimum payment for the winning bidder as a way to cover it, as well as a “ceiling price” if earnings exceed a certain level (and profits are shared).
Critically, existing or future fossil fuel plants are not eligible for implementation. (No mention of small modular nuclear reactors but maybe that's a problem to be solved in a decade or so.)
States such as NSW and Victoria thought the capacity investment scheme would do very well for their existing programs to increase renewable energy - as would other states or they would not have signed up.
Groups such as the Smart Energy Council credit the results for finally delivering on a national plan for the generation and storage of renewable energy.
"That means cheaper, cleaner and more reliable power for all Australians," said council CEO John Grimes. He called on governments to turn their eyes now to small-scale schemes that roll out batteries for homes like similar programs that accelerate the use of rooftop solar panels which are now spread over about a third of Australian homes.
Similarly, Kane Thornton, CEO of the Clean Energy Council, hailed today's approval as likely to "open up the next wave of renewable energy projects".
"Energy storage will play a critical role in supporting the massive amounts of new wind and solar needed for the future," said Thornton. "While steps to accelerate storage rollout are important, we also need to develop a market and technical framework that will enable long-term, stable storage investments."
Medibank will be offline this weekend for system repairs
Medibank advises that the system be offline for Medibank and ahm customers starting at 20.30 AEDT Friday 9 December “as we carry out some maintenance to further strengthen our systems and improve security protections”.