{"id":62868,"date":"2022-06-21T06:42:29","date_gmt":"2022-06-20T20:12:29","guid":{"rendered":"https:\/\/www.solarquotes.com.au\/blog\/?p=62868"},"modified":"2022-06-21T06:42:29","modified_gmt":"2022-06-20T20:12:29","slug":"esb-capacity-mechanism-mb2521","status":"publish","type":"post","link":"https:\/\/www.solarquotes.com.au\/blog\/esb-capacity-mechanism-mb2521\/","title":{"rendered":"ESB NEM Capacity Mechanism Design: Reactions"},"content":{"rendered":"

\"ESB<\/p>\n

The Energy Security Board has released its thoughts on a proposed capacity mechanism to help heal what ails the National Electricity Market.<\/p>\n

Who\/What Is The Energy Security Board?<\/h2>\n

The Energy Security Board (ESB) was established nearly 5 years ago to coordinate implementation of recommendations from the Independent Review into the Future Security of the National Electricity Market, aka the Finkel Review.<\/p>\n

The board is currently comprised of Anna Collyer (Chair) from the Australian Energy Market Commission (AEMC), Clare Savage from the Australian Energy Regulator (AER), and the Australian Energy Market Operator’s (AEMO) Daniel Westerman.<\/p>\n

Among the ESB’s tasks is to design a proposed capacity mechanism for the national electricity market (NEM), and it unveiled a high level design<\/a> for feedback yesterday.<\/p>\n

What Is A Capacity Mechanism?<\/h2>\n

Instead of electricity generators only paid for the electricity they pump into a system, this would also pay them to be available during periods where demand could exceed supply; in theory avoiding situations such as we’ve seen recently with more “Lack of Reserve<\/a>” notices being issued by the AEMO than you can poke a stick at.<\/p>\n

Which Generators Would Be Eligible?<\/h2>\n

This is where things get particularly thorny. Some logic would dictate that since coal and gas are the reason Australia’s National Electricity Market is in the mess it’s in at the moment, the focus on getting this capacity mechanism in place should be on renewables such as solar energy, wind power and hydro; backed by energy storage.<\/p>\n

But the ESB has said:<\/p>\n

“The ESB proposes that all resources contributing to capacity requirements be eligible to participate in the capacity mechanism”.<\/p><\/blockquote>\n

.. so, an “all of the above” approach that could potentially include coal and gas power, which the ESB says could help reduce the risk of a “disorderly transition”. That horse is already bolting as evidenced by recent events and the ESB’s assessment has been received with some trepidation.<\/p>\n

CEC: Renewable Energy Focus Critical<\/h2>\n

The Clean Energy Council says any capacity mechanism must be oriented towards the acceleration of renewables and energy storage to back them.<\/p>\n

“Any scheme that ultimately subsidises existing coal plants and unnecessarily prolongs the life of fossil fuel generation that is both high emitting and increasingly unreliable commits Australia to an uphill battle in meeting new climate goals,” stated the CEC<\/a>. “It will also delay investment in the new renewable generation and storage capacity that is desperately needed, resulting in more price shocks and energy shortfalls.”<\/p><\/blockquote>\n

SEC: Zero Emissions Option<\/h2>\n

The Smart Energy Council welcomed the paper<\/a>, but said all options – including a capacity mechanism focusing on zero emissions generation – should be on the table. It has called on the Albanese Government to instruct the Clean Energy Finance Corporation (CEFC) to prioritise financing for renewable energy storage at all scales.<\/p>\n

The Greens: Yeh, Nah.<\/h2>\n

It won’t come as any surprise the Greens were not impressed with the prospect of coal and gas being paid to be on standby to pollute (more).<\/p>\n

“We\u2019re in a climate crisis. We shouldn\u2019t be paying coal and gas corporations to stay in the system any longer,” tweeted Greens leader Adam Bandt<\/a>. “Coal and gas corporations aren\u2019t the answer to the energy & climate crisis, they\u2019re the cause of it.”<\/span><\/p><\/blockquote>\n

Environment Victoria: Outdated Thinking<\/h2>\n

Environment Victoria said the only parties that appear to like the idea of coal and gas power participating in the capacity mechanism are the Energy Security Board and the coal and gas industry.<\/p>\n

\u201cThe federal election overwhelmingly demonstrated that Australians are tired of governments giving handouts to the fossil fuel industry, only to have them turn around and hold us hostage to their profiteering,” said<\/a> CEO Jono La Nauze.<\/p>\n

Solar Citizens Slams Design<\/h2>\n

Grassroots advocacy group Solar Citizens was not happy with what it read. It wants Energy Ministers to rule out a capacity mechanism that will fund coal and gas, and for the Albanese Government to implement a storage target.<\/p>\n

\u201cThe new Federal Government has been handballed an energy system in disarray,” stated the group<\/a>. “It\u2019s now up to them to clean up the mess of the previous government by planning coal closures and accelerating the rollout of renewable energy and storage.”<\/p><\/blockquote>\n

Chris Bowen: Over To You, States<\/h2>\n

Speaking of handballing, Federal Climate Change and Energy Minister Chris Bowen<\/a> indicated it would be up to states to implement things in a way that best suits their circumstances. But this would need to be within framework and complement the Federal Government’s emissions target formally pledged last week to the UN – an emissions reduction of 43 per cent over 2005 levels by 2030.<\/p>\n

But the ESB’s paper is not a done deal – the Board will return to Energy Ministers with a draft detailed capacity mechanism design in December 2022 after considering feedback, and that will again be put to stakeholders for further consultation. It will then present its final detailed capacity mechanism design to the Ministers in February next year, including draft legislation and rules.<\/p>\n","protected":false},"excerpt":{"rendered":"

The Energy Security Board has released its thoughts on a proposed capacity mechanism to help heal what ails the National Electricity Market.<\/p>\n","protected":false},"author":17,"featured_media":62869,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[678],"tags":[],"class_list":["post-62868","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-solar-battery-news","entry"],"acf":[],"yoast_head":"\nESB NEM Capacity Mechanism Design: Reactions - SolarQuotes Blog<\/title>\n<meta name=\"description\" content=\"The Energy Security Board has released its thoughts on a proposed capacity mechanism to help heal what ails the National Electricity Market.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.solarquotes.com.au\/blog\/esb-capacity-mechanism-mb2521\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"ESB NEM Capacity Mechanism Design: Reactions\" \/>\n<meta property=\"og:description\" content=\"The Energy Security Board has released its thoughts on a proposed capacity mechanism to help heal what ails the National Electricity Market.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.solarquotes.com.au\/blog\/esb-capacity-mechanism-mb2521\/\" \/>\n<meta property=\"og:site_name\" content=\"SolarQuotes Blog\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/SolarQuotes\/\" \/>\n<meta property=\"article:published_time\" content=\"2022-06-20T20:12:29+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2022\/06\/esb-capacity-market.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"630\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Michael Bloch\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@solar_quotes\" \/>\n<meta name=\"twitter:site\" content=\"@solar_quotes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.solarquotes.com.au\/blog\/esb-capacity-mechanism-mb2521\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.solarquotes.com.au\/blog\/esb-capacity-mechanism-mb2521\/\"},\"author\":{\"name\":\"Michael Bloch\",\"@id\":\"https:\/\/www.solarquotes.com.au\/blog\/#\/schema\/person\/66afd571aa00c2e442f0192ebac2f6f1\"},\"headline\":\"ESB NEM Capacity Mechanism Design: Reactions\",\"datePublished\":\"2022-06-20T20:12:29+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.solarquotes.com.au\/blog\/esb-capacity-mechanism-mb2521\/\"},\"wordCount\":842,\"commentCount\":4,\"publisher\":{\"@id\":\"https:\/\/www.solarquotes.com.au\/blog\/#organization\"},\"image\":{\"@id\":\"https:\/\/www.solarquotes.com.au\/blog\/esb-capacity-mechanism-mb2521\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2022\/06\/esb-capacity-market.jpg\",\"articleSection\":[\"General Solar & Storage News\"],\"inLanguage\":\"en-AU\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.solarquotes.com.au\/blog\/esb-capacity-mechanism-mb2521\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.solarquotes.com.au\/blog\/esb-capacity-mechanism-mb2521\/\",\"url\":\"https:\/\/www.solarquotes.com.au\/blog\/esb-capacity-mechanism-mb2521\/\",\"name\":\"ESB NEM Capacity Mechanism Design: Reactions - 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Over the next couple of decades, 26-50 gigawatts of new variable large scale renewable energy (VRE) capacity is forecast\u2026","rel":"","context":"In "General Solar & Storage News"","block_context":{"text":"General Solar & Storage News","link":"https:\/\/www.solarquotes.com.au\/blog\/category\/solar-battery-news\/"},"img":{"alt_text":"Energy Security Board - Australia's National Electricity Market","src":"https:\/\/i0.wp.com\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2021\/01\/esb-nem-australia.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2021\/01\/esb-nem-australia.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2021\/01\/esb-nem-australia.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2021\/01\/esb-nem-australia.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2021\/01\/esb-nem-australia.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":43794,"url":"https:\/\/www.solarquotes.com.au\/blog\/solar-export-charges-mb1712\/","url_meta":{"origin":62868,"position":1},"title":"TAI Goes Into Bat For Australian Solar Households","author":"Michael Bloch","date":"October 7, 2020","format":false,"excerpt":"The Australia Institute (TAI) has said proposed rule changes that would allow electricity distribution networks to charge households with solar PV for exporting electricity would be unfair unless they were also being paid fair revenue for the benefits they provide. In July this year, the Australian Energy Market Commission (AEMC)\u2026","rel":"","context":"In "General Solar & Storage News"","block_context":{"text":"General Solar & Storage News","link":"https:\/\/www.solarquotes.com.au\/blog\/category\/solar-battery-news\/"},"img":{"alt_text":"Proposed solar export charges","src":"https:\/\/i0.wp.com\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2020\/10\/solar-export-charges.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2020\/10\/solar-export-charges.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2020\/10\/solar-export-charges.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2020\/10\/solar-export-charges.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2020\/10\/solar-export-charges.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":35203,"url":"https:\/\/www.solarquotes.com.au\/blog\/coag-energy-council-mb1303\/","url_meta":{"origin":62868,"position":2},"title":"What Happened At The 22nd COAG Energy Council Meeting","author":"Michael Bloch","date":"November 25, 2019","format":false,"excerpt":"Energy Ministers met in Perth on Friday for the first COAG Energy Council meeting in more than 11 months. Here's some of what happened. First up, it won't be quite so long between COAG Energy Council drinks next time around - another meeting has been scheduled for March next year.\u2026","rel":"","context":"In "General Solar & Storage News"","block_context":{"text":"General Solar & Storage News","link":"https:\/\/www.solarquotes.com.au\/blog\/category\/solar-battery-news\/"},"img":{"alt_text":"22nd COAG Energy Council Meeting","src":"https:\/\/i0.wp.com\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2019\/11\/coag-energy-council.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2019\/11\/coag-energy-council.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2019\/11\/coag-energy-council.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2019\/11\/coag-energy-council.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2019\/11\/coag-energy-council.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":13189,"url":"https:\/\/www.solarquotes.com.au\/blog\/coag-clean-energy-target-mb0126\/","url_meta":{"origin":62868,"position":3},"title":"COAG Energy Council Meeting Outcomes : Reactions","author":"Michael Bloch","date":"July 17, 2017","format":false,"excerpt":"As expected, Friday's COAG Energy Council meeting saw all but one of the Finkel Review recommendations approved - the Clean Energy Target (CET). Among the Finkel Review report recommendations that were given a tick at the meeting: A new generator reliability obligation requiring to guarantee a minimum level of dispatchable\u2026","rel":"","context":"In "General Solar & Storage News"","block_context":{"text":"General Solar & Storage News","link":"https:\/\/www.solarquotes.com.au\/blog\/category\/solar-battery-news\/"},"img":{"alt_text":"COAG - Clean Energy Target","src":"https:\/\/i0.wp.com\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2017\/07\/coag-clean-energy-target.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2017\/07\/coag-clean-energy-target.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2017\/07\/coag-clean-energy-target.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2017\/07\/coag-clean-energy-target.jpg?resize=700%2C400&ssl=1 2x"},"classes":[]},{"id":16523,"url":"https:\/\/www.solarquotes.com.au\/blog\/renewables-directors-sentiment-mb0293\/","url_meta":{"origin":62868,"position":4},"title":"Australian Directors Consider Renewables A Top Infrastructure Priority","author":"Michael Bloch","date":"November 8, 2017","format":false,"excerpt":"The Australian Institute of Company Directors\u2019 (AICD) bi-annual Director Sentiment Index shows directors are concerned about energy prices and policy, but are bullish on renewables. When asked what are the three main economic challenges currently facing Australian business, the top two responses from Australian company directors were energy related -\u2026","rel":"","context":"In "General Solar & Storage News"","block_context":{"text":"General Solar & Storage News","link":"https:\/\/www.solarquotes.com.au\/blog\/category\/solar-battery-news\/"},"img":{"alt_text":"Australian company directors - renewable energy","src":"https:\/\/i0.wp.com\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2017\/11\/renewables-energy-directors.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2017\/11\/renewables-energy-directors.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2017\/11\/renewables-energy-directors.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2017\/11\/renewables-energy-directors.jpg?resize=700%2C400&ssl=1 2x"},"classes":[]},{"id":22618,"url":"https:\/\/www.solarquotes.com.au\/blog\/sa-nsw-electricity-interconnector-mb0648\/","url_meta":{"origin":62868,"position":5},"title":"Proposed SA\/NSW Electricity Interconnector A Step Closer","author":"Michael Bloch","date":"July 2, 2018","format":false,"excerpt":"ElectraNet has published a draft report providing more detail on the proposed construction of a high capacity interconnector between South Australia and New South Wales. ElectraNet has been exploring options to facilitate South Australia\u2019s energy transformation, while improving system security and helping to put downwards pressure on electricity prices. It\u2026","rel":"","context":"In "General Solar & Storage News"","block_context":{"text":"General Solar & Storage News","link":"https:\/\/www.solarquotes.com.au\/blog\/category\/solar-battery-news\/"},"img":{"alt_text":"South Australia - New South Wales interconnector","src":"https:\/\/i0.wp.com\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2018\/07\/nsw-sa-interconnector-2.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2018\/07\/nsw-sa-interconnector-2.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2018\/07\/nsw-sa-interconnector-2.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2018\/07\/nsw-sa-interconnector-2.jpg?resize=700%2C400&ssl=1 2x"},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.solarquotes.com.au\/blog\/wp-json\/wp\/v2\/posts\/62868","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.solarquotes.com.au\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.solarquotes.com.au\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.solarquotes.com.au\/blog\/wp-json\/wp\/v2\/users\/17"}],"replies":[{"embeddable":true,"href":"https:\/\/www.solarquotes.com.au\/blog\/wp-json\/wp\/v2\/comments?post=62868"}],"version-history":[{"count":3,"href":"https:\/\/www.solarquotes.com.au\/blog\/wp-json\/wp\/v2\/posts\/62868\/revisions"}],"predecessor-version":[{"id":62872,"href":"https:\/\/www.solarquotes.com.au\/blog\/wp-json\/wp\/v2\/posts\/62868\/revisions\/62872"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.solarquotes.com.au\/blog\/wp-json\/wp\/v2\/media\/62869"}],"wp:attachment":[{"href":"https:\/\/www.solarquotes.com.au\/blog\/wp-json\/wp\/v2\/media?parent=62868"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.solarquotes.com.au\/blog\/wp-json\/wp\/v2\/categories?post=62868"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.solarquotes.com.au\/blog\/wp-json\/wp\/v2\/tags?post=62868"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}