Some ill-informed analysis has attempted to paint climate change and energy issues simply as a political fight between progressive and conservative political forces, writes ACF's economist Matthew Rose.
In the last few weeks news about prices in the South Australian electricity market has leapt from business sections and energy websites onto the front pages.
As in most important debates – especially those about energy and climate change – this one has unleashed varying views on what the problem is and who or what caused it.
Unsurprisingly, some ill-informed analysis has attempted to paint climate change and energy issues simply as a political fight between progressive and conservative political forces.
Of course there are political interests involved but there are also commercial interests and – let’s not forget – the public interest.
Let’s be clear: renewable energy is not the main culprit here. The problem isn’t renewable energy as much as that the National Energy Market was developed for a different era and is not equipped to handle a 21st century power mix.
And Australia has no national plan to bring the energy market into the era of clean energy.
If you look beyond the simplified analysis (perhaps a too generous term) of the last fortnight to those with interests and expertise in this area, there are a couple of clear fundamental points of agreement.
The first is that Australia’s energy system is in a period of transition.
There are disagreements about the pace we need to set for the transition, but there is an unstoppable move underway from dirty to clean energy.
The pace of climate change would suggest the transition needs to be not just managed but driven much faster, but whatever the speed of the shift, a shift is undoubtedly on.
Environmental and economic incentives for the transition point in the same direction. This is happening at the household, commercial and industrial level as people and businesses begin to harness Australia’s vast clean energy resources and take advantage of the rapidly falling prices of generating power from the wind, the sun and other renewable sources.
The second point is that Australia has no plan to manage this transition.
Australia has no plan to manage this transition
Reforming an energy system from one in which large scale centralised generation produces electricity that is transmitted through thousands of kilometres of poles and wires to one in which decentralised generation and storage has a larger role is a complicated process.
Infrastructure, pricing and market mechanisms need to be adapted, overhauled and reformed, as do the rules that control the national electricity market.
Long-term planning that involves all level of government, industry and the community is the best way to ensure Australia handles the transition as quickly and smoothly as possible.
This call is not confined to any one sector. A large cross section of organisations and individuals have responded to the recent events in South Australia by either reiterating their calls for a transition plan or by adding to their voice to the growing chorus.
They include the Australian Industry Group, which specifically called for reform of the energy market to incentivise appropriate investment; the Grattan Institute, which called for Australian governments to agree on a zero emission pathway; and the Australian Energy Council, which – representing electricity generators, among others – called for a coordinated national approach to transformation.
Add to this the voices of the Clean Energy Council, which has been calling for long-term strategic energy planning, and electricity generator AGL, which has called for a coherent national policy to manage transition, and there is a chorus of energy specialists all crying out for national leadership on this issue.
This year the Australian Conservation Foundation and the University of NSW have brought together 17 prominent Australians who are also advocating for an energy transition. These prominent people say an orderly transition to clean energy is essential for Australia’s future.
The voices calling for a plan for Australia’s energy transition are loud and clear and they have been for some time. The events in the South Australian electricity market have just pushed these voices into Australia’s media landscape again.
On 19 August energy ministers from around the country will meet in Canberra. South Australia will definitely be top of the agenda.
However, the ministers’ discussions should go beyond South Australia.
They should appoint and commission an energy transition panel to design an energy transition pathway for Australia to be presented at the ministers’ next meeting.
Energy ministers have a unique opportunity to oversee fundamental reform.
It is up to them to show leadership and ensure Australia’s energy transition is properly planned and managed.
If they take the important first step they will not have a shortage of people willing to assist in navigating the complexity of the energy transition.
This piece was first published by the Fifth Estate.