Potential Interactions between the Australian 20% Renewable Energy Target and the Carbon Pollution Reduction Scheme within the Australian National Electricity Market
Dr Regina Betz, UNSW
Senior Lecturer / Joint Director, CEEM (Centre for Energy and Environmental Markets)
Australian School of Business
The University of New South Wales
E: r.betz@unsw.edu.au
A number of major policy initiatives are currently being developed that are intended to reduce emissions from the Australian electricity industry. Expansion of the Renewable Energy Target (eRET) to deliver a 20% contribution of renewable energy to electricity supply may see around 10,000MW of new renewable generation connected to the Australian grid before 2020. A Carbon Pollution Reduction Scheme (CPRS) was proposed in 2008/09 and was expected to introduce significant changes to electricity industry operation and investment with respect to the roles of brown coal, black coal and gas-fired generation. The Australian National Electricity Market (NEM) covers all Australian States and Territories other than Western Australia and the Northern Territory, and is hence the major focus of current electricity industry arrangements.
One important question to be answered is around the role of green certificate schemes as policy instruments to drive investment in renewables. Other include mitigation scenarios to see if the expanded renewable energy generation will offset generation from some mix of existing and future fossil-fuelled plants. The comparatively volatile supply characteristics of key renewable energy technologies such as wind have significant implications for the operation of relatively inflexible coal-fired plant. However, the impact of a carbon price on promoting low-emission and more flexible gas-fired generation would facilitate wind energy integration.
Given the importance of effectively and efficiently reducing emissions from the electricity industry and expanding the renewable industry, there is a clear need for research to learn more about spill over effects in the renewable industry.
Papers
- Heinzel, C., and Winkler, T., Tradable Green Certificates as a Policy Instrument? A Discussion on the Case of Poland, EERH Research Report No.58, (2010),
» view publication [PDF, 370KB] - Cutler, N., MacGill, I., and Outhred, H., The Integration of Wind Generation within the South Australian Region of the Australia National Electricity Market, EERH Research Report No.38, (2009),
» view publication [PDF, 2080KB] - Owen, Tony / Betz, Regina 2010, The Implications of Australia’s Carbon Pollution Reduction Scheme for its National Electricity Market, Energy Policy,
» view publication [PDF, 594KB]
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