Energy Ministers met today to discuss the Energy Security Board’s recommendations for post 2025 Energy Market design, including the proposed development of a capacity mechanism.
ACT Energy Minister Shane Rattenbury put forward amendments to ensure that the capacity mechanism only applied to new, zero emissions capacity to avoid unnecessarily prolonging the life of coal and gas power plants.
“While our proposal to target the capacity mechanism at new, zero emissions capacity was not agreed today, the guiding principles now reflect an intent to reduce emissions from electricity.
“The ESB will be subject to design principles, which should ensure the scheme will not be the subsidy for coal that many of us feared. The principles reflect the need to reduce greenhouse gas emissions from electricity, and recognise the emission reduction schemes of States and territories like the ACT. The ESB will report to Energy Ministers throughout the design process, and the ACT will continue to ensure that any capacity market does not become some kind of “CoalKeeper” program.”
“We also secured agreement to the ACT leading work towards incorporating emissions reduction into the National Electricity Objective (NEO). This is important for ensuring emissions intensity of generation is considered and reducing emissions is prioritised.
“All states and territories have a goal of achieving net zero emissions by 2050 at the latest, and this means rapidly reducing emissions from Australia’s electricity sector. Reflecting these goals in the NEO will help to ensure national coordination and appropriate investment certainty as we make this transition.