The National Energy Guarantee (NEG) was announced by the Federal Government in April. This followed on from the recommendations made in the Independent review into the future security of the National Electricity Market: Blueprint for the future (Finkel review).
By Anne Wardell, Senior Lawyer & Regulatory Specialist, Compliance Quarter
An important element of how the NEG will operate is the framework which will underpin the system.
The National Energy Guarantee Draft framework
On 15 June 2018 the Energy Security Board (ESB) released a Draft Detailed Design of the National Energy Guarantee: Consultation Paper (Detailed Design). Dr Kerry Schott AO, Chair of the ESB, said in a media release that the Detailed Design ‘provides the next level of detail about how the emissions and reliability components of the Guarantee mechanism are proposed to work in practice. It builds on the high-level design considered by the COAG Energy Council in April 2018’.
Dr Schott went on to say that:
“The ESB has benefited from deep and helpful engagement from stakeholders and considered expert input and is on track to present a final design to the COAG Energy Council in August 2018.”
“The draft Detailed Design of the Guarantee responds to the clear message from the Australian community, business and governments about the need to integrate energy and climate policy in a way that improves affordability and ensures a reliable power system that is reducing carbon emissions in a well-managed manner. To improve affordability, we are proposing specific measures to ensure liquidity and transparency in wholesale electricity markets to strengthen competition.”
“All State and Territory renewable energy schemes will be able to operate alongside the National Energy Guarantee and contribute towards achieving the emissions reduction trajectory for the electricity sector.
“The ESB’s top priority now is to continue to engage with stakeholders about how we can further refine the mechanism with a view to bringing down prices, keeping the power on, and reducing the electricity sector’s emissions.”
The ESB are seeking submissions in relation to the Detailed Design and will be holding a public forum in Melbourne on 2 July 2018. The closing date for submissions is 13 July 2018.
The ESB will present a final detailed design to the COAG Energy Council on 10 August 2018.
Further information regarding the Detailed Design and the process for submissions is available on the COAG Energy Council website here. Also see our earlier article The National Energy Guarantee (NEG)—what we know so far.
We will provide a more detailed analysis of the Detailed Design proposed in future articles – for any feedback or assistance please contact our team by clicking here.