Renewable electricity storage may be the key in Australia’s energy crisis: IEEFA
This more beneficial than the proposed capacity mechanism.
Australia could benefit more from focusing on introducing renewable electricity storage, rather than further exploring a capacity mechanism, the Institute of Energy Efficiency and Financial Analysis (IEEFA) said.
According to IEEFA, the proposal of energy ministers where consumers would pay old power plant generators to keep going, could lead to an increase in electricity bills and delay the energy transition.
“A Renewable Electricity Storage Target would add new storage into the grid to complement renewables,” Johanna Bowyer, IEEFA Australian electricity analyst, said.
“This would encourage investment in new energy storage resources, rather than locking in payments to legacy assets - thereby accelerating the transition to a low emissions electricity system.”
Bowyer explained the proposed capacity mechanism could delay the transition as it will likely provide payments to coal and gas generators.
“The capacity mechanism would have to be substantially redesigned to make sure high emissions generators do not remain in the system for longer than needed, at the same time as incentivising investment in new, flexible, low emissions energy resources like batteries,” she said.
She added other initiatives could include reserving east coast gas for domestic use, and a windfall profit tax on exporters of liquefied natural gas amongst others.