Smash the NEM: Milne’s parting shot at Big Coal

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Outgoing Greens leader says Austraila’s National Electricity Market must be ‘smashed’ to provide proper incentives for renewables in battle against coal.

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Former Greens leader Christine Milne has called for the national electricity market to be “smashed” – or at least reformed – so that it can provide proper incentives for consumers to install solar and storage.1902_milne_a.ashx

In a speech to the Australian Solar Council, Milne also accused the federal government of deliberately sabotaging the renewable energy target.

But it was the NEM that drew most of her ire, and the $45 billion that was spent on networks in the last five years because of greedy networks that managed to game the regulatory system.

“I know most of the focus is on the renewable energy target, but the National Electricity Market is what has to be smashed,” Milne said.

“It was developed in the late 1990s, at the height and excitement of neo-liberalism gone mad, it was about deregulation, privatisastion, efficiency, competition policy. All these were the buzzwords.

“But it took no account that, as it started, the revolution in energy was starting.”

She said the $45 billion spent on networks were not based on need, but on greed. But regulators needed to provide incentives to ensure that grids were adapted to the future.

“The networks need to be adapted to facilitate decentralised systems, tariff systems should be adopted that encourage and properly value demand management and distributed generation.

“This would be of huge benefit to homes, businesses, manufacturers.

“An abandoned, over capitalised grid benefits no-one. We need grids adapted to the future, because we need to capture innovation and we don’t want to leave the only people connected to grid are the poorest and most vulnerable.”

Milne recommended a raft of changes after the recent Senate inquiry networks, but the changes were rejected by both major parties. She said it was the second time the major parties had ducked the issue, based on their pandering to “vested interests” and because they saw tariff payments as an effective consumption tax.

Milne accused the Abbott government of setting up a $5 billion “slush” fund, with its proposed budget for infrastructure spending in the north of Australia, particularly on ports and rail facilities.

“You wait, that will turn into Galilee Basin railway, and ports, something or other to support Adani and Gina and the rest of them up in the Galilee Basin,” she said.

“This is a problem. A huge amount of money being pushed in the right direction.”

Milne also accused the federal government of clearly wanting the renewable energy target destroyed. “It is a wholly owned subsidiary of the fossil fuel industry and renewable energy undermines the business case for coal-fired generation.

“It should be no surprise to anyone that they put the two year review on the RET. That is what they intended to do.  Don’t imagine that you are dealing in good faith (with this government).”

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8 Comments
  1. Jacob 5 years ago

    Look to New York state with regards to smashing the NEM.

  2. Chris Fraser 5 years ago

    Ok the NEM was an example of overdoing it. We are going to have to move on and plan better. Since the government doesn’t care for efficiency gains or innovation, it is up to the first-adopters to make an example (as usual). In this regard we should be trying as much as possible not to let anything get in their way. One of those things is NEM independence. There should be a clear constitutional need for it to embrace change. I would prefer public servants to run it, rather than vested interests. If they have to be sold, we should be clear that centralised generators may not own any share of it. That would be a rather obvious conflict, but who is checking on the share holding ? No one.

  3. Ken Dyer 5 years ago

    In general terms, the power plant operators bid at their marginal cost, that is the cash cost to produce a unit of energy. The marginal cost is mainly determined by th ecost of fuel. The marginal cost of solar (and wind) is zero. The fossil fuel operators cannot compete, as their marginal costs are set by the high and increasing cost of fuel.

    So Christine Milne is right. Prices in the NEM are being held high by vested interests, including government. it is a cynical exercise in which the people of Australia are getting screwed every day by the false high prices of fossil fuels.

    • Steve Young 5 years ago

      So wind and solar are happy to sell their output for $0

      • Ken Dyer 5 years ago

        Steve, you give good irony. I get 6 cents a KW for my little bit of solar feed in which translates to $60 a MW. In comparison, the RRP (Recommended Retail Price) on average in Victoria on 1/5/2015 was $55.81, not including the gold plated poles and wires fee.

        http://www.aemo.com.au/Electricity/Data/Price-and-Demand/Average-Price-Tables

        I make a profit from feed in tariffs set by Government, for electricity that costs me nothing to produce. Go figure that out.

        • Smurf1976 5 years ago

          You are getting that 6 cents every day right? Whereas the RRP, that is Regional Reference Price, is on average about 3 cents.

  4. Mike Dill 5 years ago

    The NEM will not be smashed, but will be seriously injured by the millions of little cuts as roof-top and local PV continues to saturate the local markets, and the wind blows away the cost to run the coal plants.

  5. greenmail 5 years ago

    I never imagine that anyone could deal with this government where good faith is an esential. Watch Labour get salami sliced into cooperation then sold out then blamed. The only negotiation framework that should be pursued is one where al components are on the table otherwise essential reform will elude us and the LNP will act as the bagman for the dirty smokestackers. The brown paper bags must be bulging in the IPA backrooms.

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