Circuit breaker: Why the Finkel Review may be a game-changer for climate and energy policy in Australia #energyfutures

The review of the Australian Electricity Market being undertaken by the chief scientist may break the impasse over climate and energy policy, according to a senior South Australian public servant.  Speaking in a personal capacity at an event in Adelaide, Dr Don Russell, Chief Executive of the Department of State Development for the South Australian Government, argued that the Finkel Review will be a crucial opportunity for Federal Energy Minister Josh Frydenberg to transform the government’s climate and energy policies.

Responding to an audience question on the Finkel Review – which was an outcome of last Friday’s Council of Australian Government energy ministers meeting, and will be conducted by chief scientist Alan Finkel and two as-yet-un-named colleagues – Russell said that Frydenberg had “nailed his colours to the mast” and that the review will be a “powerful driver for what happens from here”, observing that the Federal government has committed to reviewing its ‘Direct Action’ policy in 2017.  In addition, the Finkel Review – which will consist of an interim report in December and a full report early next year – will be presented to the COAG leaders (Prime Minister and Premiers), adding to its importance.  According to Russell it will be harder for the Direct Action review to ignore the imperatives of further decarbonisation, and the gap between the emissions target the Federal Government committed to at the Paris meeting and the current policy mechanisms

We were going nowhere before, now we’re taking a first step” said Russell, arguing that it was still possible to get lost, but that there were grounds for some additional hope.

Agreeing with Russell, Tony Wood of the Grattan Institute observed that Frydenberg might be able to use the events of the last three months (the price spike in South Australia in July, the blackout in September and the recent storms in Victoria) to put pressure on cabinet colleagues and argue that regardless of their stance on climate change if the Coalition “doesn’t fix energy policy, [it] won’t be forgiven.”

On 28th September the state of South Australia, which has a high level of renewables provision, suffered a blackout.  After ten days of finger-pointing, Federal and state energy ministers met in Melbourne on Friday 7th October. One agreed outcome of this was a review of the Electricity Market.

However, as Wood pointed out in an article in the Australian Financial Review the review’s terms of reference

“fail to recognise the elephant in the room – the absence of a federal policy to reduce electricity emissions in line with Australia’s committed 2030 target.”

The event, ‘South Australia’s power system:  a crisis or a canary’ had been organised by the Grattan Institute  and the Melbourne Energy Institute of the University of Melbourne to discuss the price spike in July, but was dominated by the more recent energy blackout of the 28th September. The other speakers were Jo De Silva, senior policy officer responsible for energy and water policy at the South Australian Council of Social Service (SACOSS) and Andrew Stock of the Climate Council, who also serves on the board of the Clean Energy Finance Corporation.


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