Page 2701 - Week 08 - Tuesday, 15 August 2017
FiT price against the local regional reference prices was appropriate in previous auctions. This created effective national competition on price and delivered the lowest possible costs to ACT consumers. Transferring the wholesale price reference node to New South Wales for all generators retrospectively would transfer significant settlement risk to the generators and will therefore not be contemplated for existing FiT entitlement holders. It is appropriate, however, that the advantages and disadvantages of requiring settlement against the New South Wales node be considered in any future auction processes.
The energy storage contribution was explicitly agreed to by government and its inclusion in the act would not have strengthened government support for it. Shifting the wholesale electricity price reference point for the ACT’s feed-in tariff payment settlements to New South Wales, away from the reference point in each feed-in tariff scheme supported generator’s host state, would represent a retrospective change to auction rules and may have adverse feed-in tariff cost outcomes.
I confirm that the review is consistent with the findings of the recent independent review into the future security of the national electricity market, otherwise known as the Finkel review, which was released on 9 June 2017. Importantly, the ACT’s review found that the ACT’s policy had been successful in stimulating competitively priced wind and solar projects that proceeded to commercial operation. Further, the ACT has set the standard for renewable energy support during a period of extreme policy uncertainty nationally.
As other jurisdictions progress similar policies, the need to integrate climate policy and energy policy will become increasingly important. The ACT government continues to strongly advocate within the COAG energy council for this, and the Finkel review is a prime opportunity to establish a reform path that furthers climate change mitigation objectives while strengthening power system security and delivering improved outcomes for energy consumers.
In summary, the review found that both the act and the next generation renewables auction were successful in incentivising the uptake of large-scale renewable electricity at highly competitive prices, which ultimately will result in renewable electricity being delivered at lower cost to ACT electricity consumers. The next generation renewables auction built on the experience of the solar auction held in 2012 and 2013, the first wind auction, held in 2014, and wind auction II, held in 2015, to deliver two high quality wind projects that will not only deliver competitively priced renewable electricity but also produce major local investment benefits for the ACT.
The success of the next generation renewables auction continues to move the ACT towards meeting its 100 per cent by 2020 renewable electricity target and demonstrates the territory’s continued leadership on climate change and renewable energy. I commend the review to the Assembly.
Mr Gentleman presented the following papers: