Clean Energy Council welcomes NEM Wholesale Market Review – Reforms to deliver affordable, reliable clean energy system

“The proposal put forward in the Nelson Review for competitive tenders for new long-term, tradeable contracts for ‘bulk zero emissions energy, shaping and firming’, facilitated by government but traded in the market, is a creative and novel solution. 

“The Clean Energy Council looks forward to exploring the potential of this proposal to deliver a durable and flexible framework to support the right types of investment at the right time,” she said.

 Other key elements within the Draft Report include the recommendations to:

• Retain and continue to harmonise the federated NEM structure: The CEC is pleased that the Nelson Review recognised that a coordinated national electricity market framework is essential to avoid fragmentation, duplication or inefficient outcomes for consumers. The Panel recommends that the wholesale energy market reform should continue to be consistent and harmonised across the NEM.
• Retain and complement the existing wholesale spot market: The Nelson Review considers that the existing spot market works well at an operational timescale. The CEC is pleased with the Review recommending that the market interventions should be designed to strengthen, not supplant, the existing spot market and agrees with the Panel’s conclusion that a well-functioning wholesale market remains central to achieving reliability and affordability.
• Increase the visibility of consumer energy resources (CER): The Panel considers that one of the most pressing concerns in the operation of the NEM spot market is the emergence of a growing class of consumer energy resources that are responding to wholesale prices. This includes unscheduled CERs, such as rooftop solar PV, battery storage, electric vehicles and flexible demand.   These are ‘hidden participants’ whose behaviour and impact on the system are not directly visible to the Australian Energy Market Operator (AEMO). The Panel notes that the operational issues relating to hidden participants are likely to become critical if unaddressed.
• Keep government intervention at the efficient level: The Nelson Panel considers that government intervention should be limited to addressing investment barriers that the market cannot resolve on its own, such as helping long-term risk allocation and improving investment price signals. Most importantly, the Panel considers government intervention should not crowd out private initiative. The Panel considers that where government action is required, it should be clearly linked to delivering long-term value for the public, with transparent governance and accountability.

“We are encouraged by the deep listening and extensive consultation undertaken by the independent panel led by Dr Tim Nelson, and we look forward to engaging in-depth with the detail of the proposals put forward," Freeman said.

ENDS

For more information or to arrange an interview, please contact: 

Liam Straughan
Clean Energy Council Media Officer
+61 409 470 683