Australia’s proposed electricity market reforms will need to embrace natural gas and potentially coal to “firm” weather-dependent renewables to be effective in heading off blackouts, energy bosses and regulators say.released after federal and state energy ministers’ emergency meeting on Wednesday mentions only renewables and storage in its reference to the capacity mechanism proposed for Australia’s National Electricity Market.
The final decision, however, lies with energy ministers, and Victoria’s Lily D’Ambrosio is one who has ruled out a capacity mechanism that would support any fossil fuel generation in her state. Origin Energy chief executive Frank Calabria voiced robust support for a capacity mechanism, but said it needed to include gas.
“Providing the right investment signals for new capacity is essential for our energy transition,” Mr Collette said, without commenting on how a capacity mechanism should be structured. The debate comes amid surging prices for electricity and gas in the eastern states because of coal power outages and low renewables generation that has increased demand for gas, at the same time as more is being used for heating during the cold snap.
Those demanding the exclusion of gas as part of the transition strategy may want to do some homework of the challenges faced in Europe and USA.