The ACT will not support a capacity mechanism that promotes fossil fuel energy sources, or unnecessarily prolongs the life of expensive and polluting coal and gas power plants

2021-09-24

Ahead of the Energy Ministers meeting tomorrow, ACT Energy Minister Shane Rattenbury has affirmed that the ACT will not support a capacity mechanism that promotes fossil fuel energy sources, or unnecessarily prolongs the life of expensive and polluting coal and gas power plants.

“The ACT will adamantly oppose any proposed subsidies to extend the lives of polluting coal and gas-fired power stations,” Minister Rattenbury said.

“I have written to all other Energy Ministers proposing essential amendments to guidelines if further work is to be done by the ESB.

“It is vital that Energy Ministers are absolutely clear in their instructions to the ESB that we expect the market bodies to undertake any reform in a way that rapidly reduces emissions from Australia’s electricity sector.

“The current guidelines leave too much to chance – we have to be definitive what future they are taking us towards. The target must be a 100% renewable energy system so that we can address climate change and help achieve state and territory commitments of net zero emissions by 2050 at the latest.”

Key elements proposed by the ACT are:

  • The principles should specify that any capacity mechanism only applies to renewable, zero emissions technologies;
  • Any capacity mechanism is not used to extend the life of existing generation and should encourage investment in the development of new firm capacity; and
  • Any model should encourage the timely replacement of existing capacity to focus on the ability of zero emissions technologies to deliver generation on demand, for the periods when it is most needed.

The ACT amendments also propose that the initial phase of the ESB’s work include investigating alternative mechanisms that could deliver the same result. This will enable Ministers to identify the optimal solution to ensure reliability.

“Debate over this possible capacity mechanism once again demonstrates the need for de-carbonisation aims to be incorporated into the National Electricity Objectives (NEO). Without this, it is impossible to have coherent market arrangements that provide appropriate investment certainty and deliver the outcomes that all states and territories have committed to.

“Given this, the ACT will also be seeking agreement to a process to re-examine the NEO to include de-carbonisation as a guiding principle.”