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Coalition energy target may require a “go slow” on rooftop solar

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AEMO boss Audrey Zibelman, ESB chair Kerrie Schott, energy minister Josh Frydenberg, prime minister Malcolm Turnbull, AEMC chief John Pierce and AER chair Paula Conboy.

New concerns have emerged about the Coalition government’s new energy plan, and its effect on large-scale renewable energy projects and rooftop solar.

The proposed share of renewable energy under the scheme unveiled by the Energy Security Board suggests the uptake of rooftop solar would need to be deliberately slowed to meet the numbers, or large-scale projects brought to a stop. Without such measures, the ESB’s forecasts simply don’t add up.

(They may argue that this is a target, but that was also true of the Finkel Review, and its forecast of 42 per cent renewables made it a sitting duck for the conservatives afraid of wind and solar. So the forecasts do mean a lot in the current policy debate).

The ESB said it expects a renewable energy share of 28-36 per cent by 2030, including the contribution of rooftop solar.

But the Australian Energy Market Operator, in its own long-term forecasts, predicts that rooftop solar will total around 19.9GWh by 2030, as more and more households and businesses turn to solar to deflect high grid costs, which are clearly not going to come down under the ESB’s newly unveiled plan.

That 19.9GWh accounts for 10 per cent of all demand, which leaves other renewables at between 18-26 per cent on the ESB estimate. At the bottom end, that represents  a halt or even a reduction from 2020 levels, which will be 23.5 per cent under the renewable energy target.

The Greens have already expressed their dismay, noting that the target put by the ESB reflect a slowdown from business as usual.

EnergyMix

The Finkel Review estimated that doing nothing on the policy front would still result in 35 per cent renewables by 2030, and non hydro renewables would be just below 30 per cent. (See graph above, courtesy of Melbourne’s Climate and Clean Energy College).

RenewEconomy sought clarity on this from the ESB and the agencies that are its principal components – AEMO and the AEMC (Australian Energy Markets Commission).

Did the ESB intend this figure to include rooftop solar, and therefore represent a stop to the deployment of either large or small-scale renewables? Or is the ESB actually predicting a renewable share of up to 46 per cent by 2030 (including small-scale solar)? That would frighten the Coalition horses.

We didn’t get a direct response on the numbers: An AEMC spokesperson said the ESB considered renewables to be an important part of the energy mix, “but the value of these resources to consumers is directly compromised if it results in unreliable and unaffordable electricity.”

She later said there was no intention to stop rooftop solar, but did not explain how all that renewable energy fitted in to the ESB numbers.

This revelation comes amid increasing concern that the report presented by the ESB was both rushed and half-baked. It was put together in less than three weeks following a request from the federal government desperate to produce a Plan B for Finkel’s clean energy target.

And it appears that the Coalition, which took months to consider Finkel, accepted this proposal from the ESB on the very day it was received.

The ESB letter is date-marked October 13, and that is the same day the Coalition revealed it was about to unveil its new policy to the party room on October 16. So much for careful consideration and review.

There are also concerns about the role of John Pierce, the fiercely conservative head of the AEMC, and the extraordinary powers he appears to have conferred on himself.

The basis of the ESB policy document, which Pierce is said to have largely authored, is that new reliability and environmental guarantees are to be written into the market rules. As the principal market rule maker, he will be the final arbiter of the policy design and how this will be done.

It is not a prospect that makes the renewable energy industry comfortable, given his attacks on renewable energy targets and household solar in the past, and his fierce defense of incumbent interests.

The document presented by the ESB included only three pieces of data, and all are under scrutiny.

One is the 26 per cent emissions reduction target, because it is clearly inadequate in light of the Paris deal, and there is no provision for a target beyond 2030, which does not augur well for investment certainty, or for a good climate outcome.

The other issues are around the forecast share of renewables, because it represents a massive slow-down, and the assumed cost savings, said to be $100 a year but now revealed to have been made up and thrown into the document to make the political optics look good.

Any move to try to slow down rooftop solar would, of course, be met with a tremendous political backlash, given that solar is now the only option that consumers have to reduce their electricity bills, and given that the ESB proposal will effectively lock in high electricity prices for at least another decade.

Rooftop solar is now the single biggest existential threat to the current utility business model. The CSIRO and the networks say that consumers will account for up to half of all demand by 2050, but unless action is taken to address market rules, many could leave the grid.

ESB chair Kerrie Schott noted in the letter she signed that: “The growth of distributed energy storage including battery storage and the participation of customers in energy markets in particular need to be monitored.”

No one seriously believes they would intervene, but energy policy in this country left the realms of serious consideration some time ago, and there are some who argue that households be banned from disconnecting from the grid.

This is justified on the basis that the networks should be allowed to recoup their sunk investments in the grid, regardless of the fact that it was clearly gold-plated.

The dodgy numbers in the ESB document are yet another sign of what is increasingly seen as a rushed and ham-fisted attempt by the Coalition government to produce a policy on the run. This was not what was expected of the ESB, which only met for the first time in early September.

Much faith and hope had been stored in the ESB – given the status and reputation of its members, who are highly respected and talented individuals and the heads of the key agencies, AEMO, AEMC and the AER (regulator).

But the nature of this intervention has angered the states, who as part of the COAG energy council are key stakeholders in the ESB and had expected it would work with them, and not behind their backs to deliver what appears to be as cover for the Coalition’s policy failures, presented as a fait-accompli to the states.

ACT minister Shane Rattenbury has told journalists there are real concerns about the process, and this has been echoed by others. Indeed, the states feel they have been blindsided. One source noted that the request of the ESB had circumvented its stated responsibilities ….

 …It will have responsibility for the implementation of recommendations from the Independent Review into the Future Security of the National Electricity Market (Finkel Review), and provide whole-of-system oversight to the Council on energy security, reliability and affordability in the NEM. It will facilitate better planning, co-ordination and action between governments, the Energy Council, and market bodies.

There is particular concern about the role of Pierce. COAG has been critical of Pierce’s reluctance to embrace new technologies, his delays and rejections to proposed changes to market rules, and he is widely viewed as someone defending the interests of the incumbent utilities and dragging the chain on the energy transition.

Indeed, some say that the ESB was actually set up to try to dilute his influence over policy and rule changes, and to force him to hurry up and stop kicking proposals endlessly down the road. Now he sits in the middle, directing traffic.

In this instance Pierce certainly moved with a speed which stunned observers and defied the normal glacial pace of reform and rule considerations at the AEMC. “It took them five years to get a change to the 5-minute rule, but now they have re-written the main rules for the NEM in just 10 days,” said one.

More importantly, under the ESB proposal, Pierce would emerge with extraordinary powers, because it would be his organisation, as the principal rule-maker, that would write the rules for the new reliability and emissions guarantee, rather than parliament.

This has set off alarm bells around the industry for other reasons. Pierce is no fan of the renewable energy target, and has argued consistently for its replacement.

He is no great fan of rooftop solar support schemes either, and earlier this year voiced his support for a new rule that would bill solar households for exporting power to the grid, a sort of solar tax.

He has previously rejected local generation credits, argued against network devaluations, and in his submission to Finkel noted: “Decarbonisation is not an active consideration in developing the grid and regulatory regime of the future.” He also painted this dystopian view of the energy market earlier this year.

And there is no doubt that the outline of the NEG effectively reinforces the dominance of the energy incumbents.

They will meet their obligations under virtually invisible energy market tools such as caps and hedges, and if any smaller retailer struggles to meet their obligations, they will lose their licence and their clientele would go to the retailers of last resort – the big three utilities. David Leitch suggests it will reduce competition. Happy outcome.

Analysts say it will inevitably reduce competition rather than expand it, and most say increased competition is the fundamental ingredient to reducing prices.

To add further colour to this development, and the decision by Turnbull to dump Finkel’s proposed clean energy target and put the design of the new policy in the hands of Pierce, it is said that Finkel and Pierce did not get on.

A couple of sources have told Reneweconomy of the first meeting between Finkel’s review panel and the AEMC, at which point Finkel asked, ‘is anyone here an electrical engineer’.

Upon being told no – the AEMC is largely made up of lawyers and economists – Finkel then said: ‘Then why are we here’. Finkel and Pierce are said to have had fierce disagreements over the role of markets and market design.

But it seems the decision to dump the CET and confer extraordinary powers on Pierce and his team is the ultimate riposte, or revenge: The economists and the lawyers are now firmly in the driving seat. And the incumbents and the ideologues are piled into the back seat, fully expecting to enjoy the ride.  

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  • Mark Fowler

    The Government cannot stop the uptake of rooftop solar, all they can do is stop it being connected to the grid. I think my response would be to upsize my solar, add a battery and a small generator and tell the grid “I’m getting off”.

    • Joe

      The COALition are at war again with RE. Could The COALition do the unthinkable and ask us rooftop solar households to ‘pull it all down’ ?

      • Vicki Stevens

        They would have a revolution on their hands if they tried!!

        • joono

          Those factors have never stopped them previously from executing their ‘mandates’

        • solarguy

          If a revolution is what’s needed, then sharpen your sword and don your armour.

          Don’t back down!

      • RobertO

        Hi Joe, They will be more subtle than that. It called ripple control, same as Off Peak Hot Water, They will send a signal on all grid connected household / business in an area and simply switch the solar inverter to the off position. An couple hrs or so later they will switch the unit back on

        • Joe

          Isn’t that called hacking? Aren’t there laws against that? Oh, wait, they’ll just pass a law to make it legit.

    • mick

      what i did

    • Roger Franklin

      Mark – there is a growing number of people who have installed Solar and batteries – then discovered that they can quite happy turn off the grid – adding the connection fee to their savings. When consumers discover they can do this – then the fun will really start as this is what the generators and distributors are most fearful of.

      Then we may see some smart energy distribution offering a plan where they pay the connection fee and buy your excess solar power…. but if power is consumed by the consumer, it is going to be expensive. The advantage is that you have a backup power source that is not a generator. Just my two cents worth

      • JoeR_AUS

        They must be hermits

        In June I would of needed 96 panels and a battery to break even. Mind you the roof would only take 16 panels facing true north.

        The conundrum is then, you cannot make solar and batteries work during winter – there is no enough of the weaker light and the day is 33% shorter. So you need something else: a diesel generator or connected to the grid.

        • Roger Franklin

          Joe – well I guess it all depends where you live and how much power you use. There are certain areas within Australia where it is possible to live off the grid on Solar alone, but it is not something you wake up one day and say – Dear, I have cancelled the power connection – we are going “Off Grid”! You need to plan things…

          96 Panels…. right……..well your summertime FIT will be impressive!

          From personal experience – short days can be interesting but week long rainy periods (cyclones etc!) are devastating to solar power! Actually cyclones are just straight out devastating!

          Anyway – some people make it work quite well.

          PS: have never been called a hermit before – but I can cope with that. Much better than what Josh called me…….. but that is another story.

          • Ian Smith

            A generator can be used to good effect if the heat rejected in the exhaust and cooling jacket can be recovered for space heating. This is the principle of co-generation and increases efficiency considerably.

        • wmh

          Solar can power a home in winter: [1] R3 insulation in walls, floors and ceiling. Double glazing or, at least, secondary glazing. [2] Energy storage as hot water for domestic hot water use. [3] Energy storage as hot water for hydronic space heating. [4] Energy storage in batteries for led lighting, TV, computer and induction cooking. Items 2 &3 comprise 60% (Sydney) of typical energy requirement leaving batteries, item 4, to cover 40%. [5] East Coast Low: draw power from the grid or holiday in Noosa for a week. BTW, panels need not be on the roof in winter, vertical panels on a north facing wall or fence also work giving about 88% (Sydney, more in Melbourne) of optimum angle output.

          • Hettie

            Remember too that some regions have rainy, cloudy winters, other regions have dry sunny winters.
            NSW Northern Talelands winters are dry and sunny, though June tends to be drizzly, wet and miserable. August to May mostly sunny and although peak rain is Nov to Feb, when it rains it rains, then clears to sunny. And the altitude increases panel output.
            Melbourne winters are not good.
            Use Google. There is information on the web about annual average hours of sunlight by location, and the number of STCs for system size by postcode. That’s a good guide to the relative output you can expect over the year.
            Do your homework. From your June output, it can only get better.

          • Peter Campbell

            What about the electric car? Once you have that to charge, I predict people will be back on the grid.
            BTW A recent Fully Charged episode shows an example of an EVSE which can vary the rate of car charging to match the electricity that would otherwise be exported. Unless you say you need to charge more quickly, it will ensure that you only charge at a rate that is just right to use all your own surplus solar production and not take any from the grid. https://www.youtube.com/watch?v=0EtegQfZQRw&feature=youtu.be

        • Mark Roest

          Check out ‘Passive Solar Design’ and ‘Net Zero’ — conserve and do efficiency first, then use solar and storage to make up the rest.

          • Roger Franklin

            Agree – the most efficient way to use power in your house is to… not use it! Most houses are built to a cost and with a little more, can be significantly improved.

        • Ian

          Where there’s a will there’s a way. 1. Insulation. 2. Prioritise loads 3. Hydronic heating using heat pump or solar thermal panels, gas hot water backup. 4. Backup gas cooking. Etc etc

          • Mike Dill

            Insulation (and weatherstripping and air sealing) is the primary answer for a lot of homes. It is cost effective and lasts nearly forever.

          • Vicki Stevens

            Electric hot water backup, lose the gas.

        • Hettie

          Expecting to have your solar system meet your needs year round is unrealistic, especially with such a small system. 8 panels is only 2 kw. To have any show of breaking even over the whole year you need a system rated for about double your average daily consumption, although the higher that is, the lower the proportion of your bill is the poles and wires charge, which is around the same as 5 kwh.
          Shop around for the best FIT. In NSW the best you will get is 14c, but that needs to be balanced against what you are charged for the poles and wires and the price per kwh you have to pay.
          Do your sums carefully. A spreadsheet will help you decide among the retailers. And all the indications are that a bigger system will pay for itself much faster than a smaller one.

        • Mike Dill

          I am assuming 180W/m2, and 1m2 panels. 96x180W=17.2 kW.

          In most areas you get about three of four hours of sunlight during the winter, except for the rainy and cloudy days. That should give you about 52kWh most days even in the winter.

          I do not know your location or the size of your house. With the exception of heating (and cooling), most locations can get by with 1 kWh per sq. meter, per day.

          Heating and cooling are energy gluttons if you do not have the basics, which are insulation and energy efficiency. After getting you house tight, your need may change. Even so, you may need an alternate energy source for those.

        • solarguy

          Jesus, you must suck down a hell of a lot of power needing 24kw of PV.

      • Vicki Stevens

        Going off grid is certainly the way many will go, which as you say Roger is what generators and distributors are scared of – to which I say, too bad. Greed seems to be the root of all evil in this country and it would be great to stick it to the corporate warlords. The unfortunate side affect though is as usual, those in the lower social economic margins. These people have no way of obtaining solar especially if in rented premises, unless they have great landlords or are creative enough to connect portable solar to their premises. These people will bear the brunt of exorbitant power price hikes as generators have to make up the lost revenue of those who can afford to go off grid. Our government should be ashamed of the way they are handling this whole situation – too busy trying to not lose their undertable handshakes to give a damn about the real picture and REAL people.

        I truly believe a revolution would ensue if new solar panels were banned on roofs or going off grid was made illegal. I know I would be fighting for our rights!

        • Roger Franklin

          Vicki – a great comment and yes the energy revolution is well underway, and the current energy generators are doing their best to keep the current structure in place. Disappointingly the Australia Govt appears to be doing what it can to ensure the current energy generators are kept safe. Solar and in particular Batteries have a long way to go, but it is the Batteries that are the disrupter of the pair.
          The article reads “Go Slow on Rooftop Solar” – which lets all have a reality check – if 1.7 million homes have solar today, I think the solar train left the station some time ago!
          When we read that even the ACCC endorse the way the energy generators are operating in the market today – then even through they are operating within the rules, they are doing to to benefit their profits – which most would expect them to do. Should they be doing the right thing by the general public – that is debatable, however as they are public companies, their duty is to their shareholders.
          Earlier in the year Standards Australia tried to push through rules around home batteries – why – they are the key disrupter and the key to the energy revolution.

          As regards to renters and landlords – we are still at the early adopter stage of this revolution. The analogy I use is a Microwave Oven – 30 years ago they were very expensive but today everyone has one and people look at you odd if you don’t have one! Solar panels on houses will become the same – people will wonder why you don’t have solar panels and renters may choose houses with solar panels installed over those that don’t – but it will take time. Will the govt help – well it doesn’t seem the current crowd will!

          As for moving off the grid – very few people will do this for a variety of reasons, however as the price of batteries comes down, they will become financially viable. The early adopters most likely looked at solar and batteries with a combination of both economic and emotion and just did it.

          The good news is that most of the State Govts have renewable energy targets so lets get behind the states that are doing things and leave the Federal Ministers to themselves. States have a lot of power and can for example, drop stamp duty and registration costs on Electric Vehicles for 24-36 months to kick things along. Just putting it out there states…. as the Cadbury song goes “Wouldn’t it be nice”

          • solarguy

            I agree, get behind the states that are for RE.

          • Vicki Stevens

            Agree with most everything you have said Roger – and yes the batteries are the disrupter, but I believe (as a sustainable building designer and consultant) that a lot of homes and business premises will eventually go off grid, opting for their own electricity generation and storage. No middle man and just an annual maintenance fee will appeal to many. Already solar panels have up to 30 year warranties and inverters 10 years (same as average hot water system), so with costs coming down the incentive to take care of yourself is great – especially if our pathetic federal government can’t get it’s act together – too tied to the puppet strings of fossil fuel industry.

            This will still disadvantage low income earners though.

            State governments should be commended for their initiative on RE, Jay Weatherill is a champion, as is Vic and NSW Premiers. Canberra is vying for 100% renewables by 2020 – yes 2020!!

            The momentum for clean energy has gained to much traction that governments botched playschool antics can’t stop it – which is great for the environment and great for new business, not sure about electricity prices though.

        • solarguy

          The thing is Vicki, is that you don’t have go off grid, see my post above. You can beat the bastards at their own game.

          • Vicki Stevens

            Yep, agree totally, but still think over time many will chose to go off grid as over the long term (if you plan on staying put – home or work premises) it will be cheaper to pay off a RE system with a small annual maintenance fee than to keep paying quarterly electricity bills, which won’t ever come down, regardless of what our politicians say.

      • solarguy

        I’ve mentioned on this forum before that my SAC charges are paid by my solar export. But better than that, I actually make a profit. September that profit was $61 and I didn’t want for power.

        Anyone can do the same.

    • Brunel

      Would we be allowed to stay connected to the grid if the solar panels on the roof do not export electrons to the grid?

      • JoeR_AUS

        Sort off with a Smart meter, you consume first (solar) and IF any left it will go to the Grid.

      • Hettie

        Who knows what our moronic government will do from one day to the next?
        If they want energy security, getting in the way of domestic and business solar is not going to help.
        Rooftop solar kept the lights on in NSW last summer, and will again for the forseeable future.

    • David Klemitz

      +1. Let the market decide, not the (Communist) Central Planning Beaureu. Are we becoming that Chinese ? Boss decides, save face, political correctness etc.

      • Miles Harding

        More like Russian. If the LNP can wind the clock back far enough, we could also have Stalin, a role that is sure to appear to several on the front bench.

    • Miles Harding

      “getting off” has a properly positive connotation here!

      You may also need a small diesel generator to charge the batteries at some times of the year. There seem to be plenty of electric start “super qulet” (really only moderately quiet) units, designed to be integrated into off grid systems these days, so one more impediment to going off-grid disappears.

      Another possibility is to use a 40+kwh electric car as a bucket to charge the battery on those occasions when topping up is needed. This may be a reason to convert so the electrical system is accessible.

      Of course, electricity providers that are willing the play the energy security game fairly with consumers would make staying on on the grid a lot more palatable, if not actually advantageous.

    • solarguy

      Think again Mark. I wouldn’t anything past these bastards. They could kill you if they wanted to. Such is the power of money and screwed up ideology.

    • Hettie

      Even the idiots know that without rooftop solar the lights WILL go out.

  • JoeR_AUS

    Well After my 8 panels made 70kwh for the month of June, I can see why!

    • Joe

      Hi Joe, another Joe here…a great name to be sure, yes! I have 24 panels and did 187 kWh in June. I have shading issues with trees and the lower sun track in winter affects my production. But when the sun tracks higher in the other seasons my little babies up top go gangbusters.

      • JoeR_AUS

        Hi Joe,

        June in Sydney was a shocker, cloudy every day. July managed to get 105 kwh.

        What feed in do you get? Origin is paying only 9c.

        I can see why people would not be fitting panels with such low feed-ins?

        I now have smart metering (Sept) but its just better to avoid using power between 2pm-8pm whens its 58c

        • Joe

          Hello again Joe, I live in Sydney and Energy Australia is my retailer, since July 1 is paying a FiT of 12.5cents…up from that previously miserly 6 cents! Origin only pating FiT 9 cents is appalling…time to switch retailer? In July my little babies pumped out 292 kWh’s, August 484 kWh’s, Sept 570 kWh’s….the sun higher in the sky makes a big difference for me. Whilst I love those mature gum trees, the neighbours trees shade me in winter. I am also on TOU billing and that 2pm – 8pm section is rather cruel. A bit of conscious management helps reduce the cost in that time section. Enjoy your solar, yes.

          • solarguy

            That’s great Joe. It’s a special, wonderful feeling isn’t it. Look I hate to brag, but for Sept my hybrid system exported 749.2KWh and that was after loads were supplied and only imported 1KWh.

            Yeah, ok I’m a skite. Guilty as charged.

          • Joe

            …749kWh export, just awesome…Now I know why you are called ‘Solarguy’, yes…Keep on shining my Solarguy.

          • solarguy

            Cheers mate, you keep on shining too.

      • Hettie

        My 20 panels were connected last week, and 2 hours later it clouded over.
        Overcast, cloudy until yesterday, but….
        The inverter says it has produced 196.2kwh in 8 days.
        Right now, 1813 hrs, light cloud, 172 watts.
        Am I happy?
        Hell yes.

        • Joe

          IKeep on shining young Hettie !

          • Hettie

            Why do you keep calling me “Young,” Joe?
            I’m 72 years old.

          • Joe

            …a term of affection, Young Hettie. No matter our physical years we are all ‘youngsters’ at heart.

          • Hettie

            Oh. Well. That’s alright, then.
            Sometimes I am a very grumpy old woman.
            Sometimes not so much.
            You keep shining too.

    • Brunel

      2.33 kWh/day does not seem like much to me.

  • Dan

    The SREC legislation allows for a reduction in the clearing house price and a review of that price was actually written into the original rules if certificate creation in 2015 was greater than 6 million. It was over double that so you could argue that the rooftop solar market doesn’t need that high a subsidy to thrive. We saw recently that new system installation didn’t slow down when the STC price fell under $30.00.

    • Jeff Bye

      Very astute. It was actually Penny Wong that wrote in that 6m STC trigger.

    • Hettie

      Bear in mind that the lead time from first enquiry to installation is around 8 weeks, or even longer.
      The STC price dropped mid August, to $26, then quickly rebounded to $33.
      The retail price of power, however, ain’t gonna drop any time soon.
      Any fall in pv take up because of the STC drop will only now be starting. If it happens at all.

      • Dan

        True. Latest figures still show close to 500k per week submissions so there was no slow down. With no market mechanism like with the LREC to temper prices if there is a large generation of certificates the review option was the only way to reduce the size of the subsidy if it was too generous. The Govt could easily reduce the clearing house price to, say $30, and claim it is fair and only trying to level the playing field wrt Large Scale projects, and also to trim power bills. System owners would still be getting a bigger rebate versus system costs that a few years ago as the cost of panels and inverters has come down a lot.

  • I’d like to know more about Pierce – appears unmoved by climate concerns, influential amongst some powerful informed members of the ESB and able to get his policy design and personal power augmented and endorsed by the Government so quickly. The policy has not be endorsed by some key players – so unless it is really good it will add to energy policy trainwreck. Starting to make Kevin Rudd’s more hasty policy moves look considered.

    • Vicki Stevens

      Yep, our great leaders are following in the footsteps of their idol, Trump, who has planted climate science (actually science in general) deniers and strong fossil fuel advocates in his inner circle. Truly makes me sick seeing the length of time it took for Finkel to get his report together and then the time our great leaders needed to digest and respond to it while throwing together a group (of FF advocates) giving them a week to come up with a plan and then agreeing to implement their recommendations the day it was released – really WE need to stand up and make our government accountable for it’s relentless blatant support of the fossil fuel industry to the detriment of the 99% of WE the people of Australia they are meant to be representing.

    • Joe

      …are you related to that other Turnbull?

  • howardpatr

    Pierce and the AEMC board needs to revealed for what they really are – lap dogs to the corporations controlling the nations electricity.

    Pierce must have a large responsibily for the parlous state we are in; both in terms of generation and the lack of progress in renewable energy technologies.

    A dangerous individual working under cover who should be called before a Senate Committee armed by experts; not economists lawyers.

    • Ian

      That’s right armed experts , sorry couldn’t resist the pun:)

  • David leitch

    Giles

    I think this article makes a number of good points.

    A comparison of the five minute rule decision time and the time for this major rule change is revealing.

    There are inconsistencies between this and the Finkel Report Eg where does the reliability obligation fall? On generators per the “adopted” Finkel recommendation or on the Retailer. Assuming there is a difference.

    John Pierce’s role is well worth questioning.

    The States have a right to be unhappy. How is it that an ex chief of staff for Turnbull gets appointed as Chair of AEMO

    The AEMC was specifically criticised for a lack of meaningful KPIs in the Finkel Report and this should be Pierce’s responsibility.

    • Julie Mulhauser

      Hi David,
      The timing between this ‘policy’ and ACCC head Rod Sims comments earlier this week on the causes of our high electricity looks like the right hand doesn’t know what the left is doing! One thing is for sure that electricity prices will not fall with this new policy!

      My understanding is that AMEC has kicked the 5 minute settlement period can down the road for another 4 years!

      Crickey, 13 Jan 2009, wrote an excellent piece on Mr Piece when he was appointed Secretary to the federal Department of Resources, Energy and Tourism when Martin Ferguson was minister. There was a less than glowing assessment of his time as NSW Treasury Secretary. He apparently was a key architect of the government plan to privatise the state’s electricity and during his time there was also a lack of maintenance of the state’s infrastructure.

      In addition – during this time he apparently was recommended for various bonuses by the then Treasurer Michael Egan – who also approved a 6 month – $200 000 study trip to the US.

      Prior to this he was with Pacific Power and the Electricity Commission of NSW.

      One of the AMEC projects is something called ‘Power of Choice ‘ which commenced in 2011 and aspires to draw a ‘line’ between regulation and market dynamics.

      On the face of it – it looks like Mr Pierce is not only firmly in the free market camp but the industry he is charged with regulating!

      • MaxG

        I am continuously surprised why anyone in their right mind would believe that power prices ought to come down. They haven’t and they won’t! Get used to it.

    • Thanks David. And i meant to point out in the story your excellent analysis of why AEMC should be held accountable by the COAG on its KPIs. So here it is: http://reneweconomy.com.au/someone-needs-judge-performance-aemc-10893/

  • Radbug

    Coal & Natural Gas have a huge Achilles heal in “Big Dada” Xi. He’s pushing Big China, and Big China will NOT do business using American dollars. So, the hard word is coming down, “accept yuan in payment for your coal and LNG exports to China, or forget about the Chinese market!” Washington will go ballistic if Canberra allows the coal & LNG exporters to knuckle under. The Australian coal & gas industries (and iron ore miners as well) are between a rock and a hard place! And it couldn’t happen to a nicer bunch of people!

    • David Klemitz

      Good one ! Forget USD or CYN, Ethereum 😉

      • nakedChimp

        What’s digital gold gonna do?
        This stuff will vanish from a saturated market faster than ice in summer, hyper deflation anyone?

  • Hettie

    Do these troglodytes seriously expect to be reelected?
    Do they think COAG will accept this load of tosh?
    Do they expect it to pass the Senate?

    • David Klemitz

      Yeap. Did you know that US coal miners who got a repreave courtesy of the Trump administration don’t want mining jobs now, the want tech jobs !

    • solarguy

      Hettie, Money talks and bullshit walks. With their smoke and mirrors trick they hope and probably believe they’ll con enough weak heads to vote them back in. It worked before.

      • Hettie

        Yes, it did work before, but- those who believed that Waffles would deliver, have now had long enough to realise their folly.
        Those who voted Coalition because their parents did are dying off.
        The last election came sooo close to tipping the bastards out, and who knows, there were polling booths in North Qld that ran out of ballot papers. Allegedly. Certainly many people were prevented from voting…..
        Anyone who has been paying the slightest attention must know that debt and deficit are far worse now than in September 13, and that that Liberal Party is tearing itself apart. That the failure to act on climate change is criminal, that wages are going backwards and home ownership is now a pipedream.
        The Coalition cannot survive another election. But both majors are on the nose, and which of the minors will pick up the slack is anyone’s guess.
        Dog help us if it’s PHON.
        And while the myth that Rudd’s deeply flawed of a CPRS should have been passed prevails, the Greens face an uphill battle.
        The coming State elections will give us some indications of the wind direction.

  • Mark Roest

    If people put the maximum solar on their roofs, and feed it first to their cars and trucks, the rest to the building, they may save enough money to pay the system off in a couple of years. Of course that means buying battery electric vehicles, or converting vehicles to battery electric. If there is not enough room on the roof, solar canopies can be put up over driveways, parking, and / or outdoor work and / or leisure areas. If the feed-in tariff is not acceptable, make sure the laws allow at least selling electricity among neighbors within a block, and preferably throughout a neighborhood and / or tract. Then set up a smart micro-grid.

    • RobertO

      Hi Mark, John Pierce wants a solar tax, he wants more coal and he wants no demand management. Look at all he has tried to stop or slow down (the 5 minute rule will take until 2021?). He an old coal miner and will not change. The states will not accept this, and COAG will not either. This is also how not to run this country. What a joke we have become! We need engineers to design a system to run this country, to plan ahead 5 to 10 years minimum.

      • MaxG

        We’ve always been a joke. We get told we are the best; what is not said: in the 3rd world country category.

    • Vicki Stevens

      F… the laws – our government doesn’t give a damn about us, so why should we follow their corrupt/biased laws. If we want to set up micro-grids we WILL do it. I’m sure if anyone is confronted by the law about this issue, a social media outrage will put the pollies in their box! Renewables are the way of the future – regardless of what the fossil fuel industry wants and what laws they pay our government to implement. It’s time we took a stand.

  • RobertO

    Hi All I watch the TV version and there was nothing positive in it at all. How to mislead the public is a better statement, very much do not answer any question. Slimey come to mind. Craig Kelly was better on TV and appears better and more truthful. Yes he is happy that this will limit RE to 26-28 % (but that not what we need in Australia and nor is it what the rest of the world appears to be doing). The COAL:ition will lie and cheat to keep power in this country!
    I then rate Craig Kelly as a – 50 compared to new NEG board with two tongues at centre at -85. If this goes ahead the country is to be shut down and closed for all business.
    Look at the person whom wants control, look at the list of things that have been binned.
    He should never be in there as he is a believe in the 19 century. It the only way to work? And I think he is just as slimy. Two Tongues has been conned and this will be another nail in the COALition coffin

  • Tom

    Fantastic article. It’s about time someone played “the man” as well as “the ball”.

    Great to read an article that finally singled out one of the conflicted, incompetent, and probably outright corrupt members of the AEMC – John Pierce, and to question why the hell this muppet has been given the power that he wields.

    Many of the other members of the AEMC, according to their profiles, are even more conflicted as this bloke. Clearly they’re also equally incompetent. Probably corrupt too, given some of the rubbish they’re coming up with.

    Keep the heat on guys. Or as they say “Follow the money”.

    I look forward to seeing what you find.

  • Damon Schultz

    Joining with others in congratulating the author on an excellent piece combining analysis and commentary. Well done.

  • luke sidewalker

    “Fairfax Media revealed on Saturday that (national party president) Mr Anthony’s firm, SAS Consulting Group, was representing energy companies such as Santos and Delta Electricity as the Coalition mulls important energy policy decisions.”
    http://www.smh.com.au/nsw/calls-for-investigation-into-national-party-president-larry-anthonys-lobbying-firm-sas-group-20170930-gyrxkz.html

    Be good to regulate lobbyists.

  • lin

    The LNP government ignores expert advice and introduces a policy written by industry for industry. This is just business as usual for this mob. They will hand over government cash to their mates as fast as they can get away with it, and allow government protected private monopolies to keep their hands deep in our pockets for their own enrichment, protected by a compliant mainstream media and laws they wrote to prevent them from ever facing justice for their treachery and betrayal of the citizens of this country.

    • solarguy

      Crime of the Century that has been in the planning for a long time.

  • BushAxe

    The political machinations in this are incredible, surely Pierce knows he’s on borrowed time if he gets this through or more likely the NEG will get torn to shreds by COAG and the status quo will continue. The speed at which the AEMC has moved on this has clearly been noticed by more than a few!

  • Farmer Dave

    Great stuff, Giles! The reported exchange between Finkel and Pierce was priceless – and very believable. I understand that the AEMC’s current legislation does not require it to make emission reductions one of its principal objectives. Do you think it would make a difference if the legislation that established the AEMC (and AEMO) required them to ensure that the NEM does all it can to further the objectives of the Paris agreement? Perhaps if Labor really are considering supporting the NEG they could make such legislative amendments a condition of their support. After all, if the solution to the trilemma is to build it into the operations of the NEM, their meeting the three objectives should be in the legislation. Further, given the ratchet mechanism in the Paris agreement, the legislation should point to the 1.5 degree aspirational target, not some watered down pale imitation of it.

  • David Mountseer

    Your statement that solar is the only way consumers can reduce energy costs is just so inaccurate. A single-strategy approach to the hugely complex energy supply AND DEMAND- side issues we have is simplistic in the extreme. It ignores the huge inefficiencies we have on the demand side, growing all the time with ever-growing proliferation of air conditioning. Have a look at Queensland; almost bankrupt when it comes to demand-side policies, initiatives; all that is ever spruiked is PVs!! Most other states do at least have demand-side policies and programs, as weak as some of them might be . It’s time we all all stzrted facing this issue square-on, realised it’s complicated and must be addressed with a comprehensive response; there is no silver bullet, especially PVs. Its just populist nonsense.

    • System wide, you are quite right. But unless and until those system wide reforms are implemented, and result in an actual price reductions, then the obvious and only choice for consumers – apart from energy efficient lighting etc – is to install PV. And that can deliver significant savings.

      • RobertO

        Hi Giles, yes to the savings, until “We need the Solax Tax and the Door Daily Fee imposed so we The Energy Security Board can build new Coal power stations”. The COALition did not order new coal power stations, the ESB did under the requirements of AEMC leadership and never mind the Australian Paris Agreement (APA) (we are not required to legally follow APA so will rename it APA 2.0. The COALition just securied your power. Labour want insecure Power will be the motto.
        The general election may be called this month or early next.

      • MaxG

        Energy-efficient lighting — while valid — is more of a lip service, when you compare it to what a single change in the building code would do: insulate at least to R3 in the walls and R6 in the ceiling no matter where you are in AU. This will take 30-50% off the annual electricity bill… and in my books will be the most effective change.
        (But since industry writes the code… and has no interest in benefits for the customer; this will not happen.)

        • Mike Westerman

          We had a scheme for that which delivered insulation for 2M homes. But instead of acclamation it was ridiculed, ripped off by greedy private sector interests that are supposedly so efficient and virtuous, wrongly lampooned despite better than normal safety records or house fires. But Australians are captive to a biased, ignorant, foreign owned media so what do you expect?

    • RobertO

      Hi David Mountseer, You have a very good point, but you also have to remenber that those incharge have vested interests and will not let the little people have a say in any of these arguments. John Pierce wants little or no interference in how he runs the 19 century system that he has been in control of (and it poses the question “how much control has he been given in this NEG arrangement?”)
      Say 15% of prosumers leave the grid, will he want to impose a a fee because we have the grid at your door. Remember he wants a solar tax so a grid door fee is on the cards and may be retrospective (You were connected so we have the right to bill you). In all of this the longer the fight last the more money the encumberents make as large profits. As the price of coal rise power is going to rise and yes there may be some downward pressure on wholesale prices but there is little prospect of Solar and Wind making the retail price cheaper.
      We need an engineering plan, not a lawyer plan.

  • John Burnett

    The obvious thing to do is get rid of this incompetent, coal loving, climate denialist government.

  • Peter Campbell

    It is not obvious to me how the NEG would stop domestic PV installations. There might not be any RET or RECs but so what? Won’t people just install PV anyway and just look to the grid like less demand?

    • RobertO

      Hi Peter Campbell, To install PV you need grid connection so a “Solar Tax” will help slow down installations, and if you decide that a Battery connection without grid connection then they might have a “Front Door Grid fee”, (the network goes past your front door so we have the right to bill you a fee daily). See below for more on how it may appear.

  • Les Johnston

    The issue would be fixed if Pierce had his private assets opened to scrutiny and able to be sued for damages. People in this position should not receive lumps of tax payers hard earned money without be expected to pay up if their decisions can be shown to be wrong in the future. They would not longer act as props for vested interests.

    • MaxG

      Wishful thinking. Any fine will be lower than the gain. Example: tax avoiders.

  • Barri Mundee

    Can’t wait for the opportunity to vote this federal government out!

  • solarguy

    This is not a policy failure. This is a STRATERGY to kill renewables, by the government on behalf of their FF benefactors. Getting mad about it is understandable, not doing anything about it would be to resign as stupid sheep. They don’t want us to fight and to avoid an attack, up comes the smoke and mirrors.

    The ballot box is our weapon, use it and kick these greedy control freaks into the bin where they belong.

    My sword is already drawn!

  • neroden

    Can Pierce simply be arrested for treason?