Australia’s chief scientist, Alan Finkel, will lead an energy security review determining whether the national electricity market can deliver reliable base load power while meeting Australia’s climate change commitments.
Energy ministers held an emergency meeting on Friday and agreed to hold the independent review, which will deliver its preliminary findings in December.
The communique issued after the meeting says the review will take stock of the current state of the security and reliability of the national electricity market and provide advice to governments on a “coordinated, national reform blueprint”.
“In light of this body of work, the Australian government’s commitment at Paris and the integration of climate and energy policy at the federal level, the blueprint will outline national policy, legislative, governance and rule changes required to maintain the security, reliability, affordability and sustainability of the national electricity market,” it says.
The federal government evidently sees the review as a mechanism to pressure the states to wind back their renewable energy targets.
In a statement issued after Friday’s meeting, the federal energy and environment minister, Josh Frydenberg, said the agreement to hold the review meant that ministers had agreed that “energy security, reliability and affordability is their primary responsibility”.
He said regulators had briefed Friday’s meeting that there were “broader issues” about the reliability of the system as a result of the higher uptake of intermittent power, particularly wind and solar, and the flow-on impact on to interconnectors.
“We actually heard at this meeting from the Australian Energy Market Commission that the state-based targets do raise serious questions about the efficiency, the cost and location of investment decisions,” Frydenberg said. “That work is still under way.”
But South Australia evidently sees the review as a means of building an evidence base and support across Coag for a form of carbon trading for the electricity sector.
The South Australian energy minister, Tom Koutsantonis, told the ABC after the meeting he had raised the issue of an emissions intensity scheme during Friday’s meeting, and he intended to build the case for a sectoral baseline and credit scheme as a mechanism for forcing an orderly transition in the national energy market from coal to gas and renewables.
He said there was a lot of support for the proposal in Coag, and that in pursuing the emissions intensity scheme, South Australia was only supporting a policy that Malcolm Turnbull had himself supported in 2009.
Frydenberg continued on Friday to dead bat questions about whether Canberra would countenance a trading scheme for the electricity sector, or push the federal renewable energy target out beyond 2020 as a means of allowing the states to step back from their schemes. “I’m not going to pre-judge the outcome of our 2017 review [of Direct Action],” he said.
The prime minister sought the one-off meeting of energy ministers following the storms that caused a statewide blackout in South Australia last week.
Turnbull had linked the SA blackout explicitly to the state’s use of renewable energy, calling it a “wake-up call” for state leaders who were trying to hit “completely unrealistic” renewable targets.
Friday’s communique, on the basis of a preliminary report from the Australian Energy Market Operator, said the cause of the blackout was the weather event, resulting in multiple transmission failures, including the loss of three big 275 kV transmission lines north of Adelaide.
The prime minister’s rhetoric triggered a furious backlash among the states and a fresh outbreak of toxic climate change politics after a period of relative calm, prompting a coalition of business and energy groups to call for cool heads and bipartisan cooperation in advance of Friday’s meeting.
On Friday, Turnbull continued to face off against the states, describing ambitious renewable energy targets as “heroic” and “very much a Labor obsession”.
“South Australia is one that has achieved a very high level of renewable energy. If you look at Queensland, where they are currently at about 4%, they say they’re going to get, by 2030, to 50%. Well how on earth is that going to happen?” the prime minister said.