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Reaction to Finkel Review confirms: stick to solar

Alan Finkel author of the Finkel Review.

Reaction to Finkel Review confirms: stick to solar


If ever you find yourself crossing to the dark side and want to torture somebody, take them through a play-by-play of Australia’s climate change debate. It’s enough to make a chicken pull its teeth out.

Bipartisanship on emissions trading at the 2007 election (yup, even John Howard supported an ETS), was slowly replaced by Tony Abbott’s war on all things green. Malcolm Turnbull, the former climate warrior, has been left with a party divided on tackling climate change, and the future path for the energy industry remains unclear. It is this uncertainty that has helped drive power prices into the stratosphere, steering more than a million Australian homes towards solar.

So when Alan Finkel, Australia’s Chief Scientist, released his long-awaited review into the energy sector (The Finkel Review), along came a glimmer of hope. Hope that maybe, just maybe, our leaders would get their act together and do some governing.

Things looked good. A day before release, Bill Shorten said he was keen to end the energy wars. Malcolm Turnbull spent the day looking forward, rather than over his shoulder. We’ll go over the reactions in a bit.

First, a quick note on Dr Finkel’s Independent Review into the Future Security of the National Electricity Market. At 212 pages, its a laborious read, so let us unpack the key points.

A clean energy target:

  • The primary aspect of the report. The target will force electricity companies to provide a certain percentage of their energy from renewable sources. This differs from the Renewable Energy Target, which aims for 23.5% of Australia’s energy to come from renewable sources by 2020. Both targets aim to increase the role of renewable energies, but in different ways. For all its virtues, the Clean Energy Target will almost certainly drive up electricity prices.

Batteries are the future:

  • Dr Finkel recommended a greater focus on energy storage, particularly for generation plants. Designed to provide greater grid stability, and avoid further chaotic situations, like that seen recently in South Australia.

A focus on natural gas:

  • The report signalled a greater effort to increase the viability and sustainability of natural gas extraction.

Greater stability:

  • A call for power plants to provide at least three years of notice before closure. While it would certainly help avoid another Hazelwood, logistically, it’s nigh on impossible, and unlikely to be implemented.

Overall, it was a pragmatic report that tried to bridge the deep ideological divide in Australian politics.

Now to the fallout of the Finkel Review.

COAG members received the review well, and faint praise came from ideologically diverse bodies, like the Climate Council and AGL. The Greens called it too soft on coal. Malcolm Roberts questioned the validity of climate change, and the public questioned the merits of democracy.

But all eyes were on Tony Abbott. Once again, the sniped sniper seems unhappy about the demonisation of coal, and he and his conservative faction look set to scupper Turnbull’s plans to enact real change. It looks possible that we’re set for more parliamentary skirmishes that go nowhere.

Without action, power prices are set to continue in one direction, and it isn’t down.

There are now three scenarios:

The status quo:

  • Though clearly unsustainable, it seems like we may be destined for more of the same, which means electricity prices will continue to rise sharply.

A clean energy target:

  • If both sides pull together and adopt the proposal, it would be a huge step forward in bipartisan energy policy, however, it is also expected to drive up your power bill in the short term.

An Emissions Trading Scheme:

  • Ruled toxic by the Coalition. Supported by Labor, the electricity industry, and virtually every major company in Australia, it will likely be enacted upon Labor’s return to governance. Should have less impact on power prices, but still at least 3+ years away.

So what does it mean?

Either way, electricity prices are rising, while solar system owners continue to reap the benefits. Ironically, a recent solar convert is known climate sceptic Cory Bernardi, who has just installed a 12kW photovoltaic system on his South Australian home. His reason shares the sentiments of many.

“The inept electricity policies of federal and state governments left me with no choice. Like most South Australians, I can’t afford to have my power shut off for days at a time but unlike most South Australians I can afford to spend money to do something about it.”

As Bernardi so angrily describes, solar is a buffer between your electricity bill and the debacle that is energy politics. It also goes to show that it doesn’t matter where you sit on the political spectrum, money speaks the same language… 

More to come on the Finkel Review. 

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