Turnbull’s NEG begins to fall apart

Via AFR:

The Energy Security Board’s discussion paper on the National Energy Guarantee shows the ESB has begun to recognise “the complexity of the beast it has created” but made no progress in resolving it, says Bruce Mountain, director of Carbon + Energy Markets.

The ESB paper released Thursday posed 79 questions to be resolved before the design of the National Energy Guarantee (NEG) can be completed, altered some of the key language in the initial discussion paper released four months ago, and breezed lightly over carbon trading and climate change.

One key change is that language suggesting the NEG’s reliability obligation could require retailers to buy “fast starting and slow start but longer running resources” has been dropped in favour of a requirement that retailers contract to meet “reliability gaps” forecast by the Australian Energy Market Operator.

Mr Mountain said this change didn’t address fundamental flaws in the design of the NEG – placing reliability and carbon emissions reduction obligation on retailers and major energy users that participate directly in the National Electricity Market, and requiring them to acquit their obligations via contracts that can’t be physically honoured in the NEM.

That’s because the NEM is a mandatory pool that all market participants have to buy and sell into regardless of any contracts, and most contracts today are pure financial contracts that do not specify the source of the electricity or its emissions, Mr Mountain, who has previously criticised the NEG, said.

“They are doing no more than throwing their hands in the air and saying, ‘what do you think about how this will work?’. They have provided no explanation about how it will work in a mandatory settled contract pool,” Mr Mountain said.

This is a wholesale electricity market wrecker. The NEG will never see the light of day. It is a political fig leaf for failed carbon policy.

Houses and Holes

Comments

  1. There is only one story about the PM this morning. He and his Deputy are literally at each other’s throats in a narcissistic struggle to the death for their own base self-serving purposes. Power and survival is the only ethic when conspiring pollies like these fall out. Tune back in after leave and an overseas trip.

  2. TailorTrashMEMBER

    Nationalise the lot and be done with it ……….god help us if we ever get into another war of consequence close to home …….imagine the bickering
    about the supply of electricity and gas to power war critical industries as the big pile of CEOs try to protect their bonus ………..not to mention the lack of petrol refining
    to keep the engines of our few vechicles and planes going ……..Straya total fcukup !

  3. NEG is a huge ClusterF’ nothing good can be said about it, it’s just complete stupidity masquerading as a solution,solution to what! it fixes absolutely nothing.
    Hopefully calmer minds can see what needs to be done and are willing to take control/ownership of the situation unfortunately we’re in a situation where everyone that could fix the problems is saying I didn’t create the mess so I’m not going to clean it up. Result is a lot of skilled people sitting on the sidelines and making as much money as they can from the unfolding fiasco, and can’t say that I blame them.