Blueprint for Australian electricity industry overhaul — prompted by 2016 SA blackout — to be released

POWER storage to keep the lights on will be a critical part of today’s crucial Finkel report, which was sparked by South Australia’s statewide blackout.

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POWER storage to keep the lights on will be a critical part of Friday’s crucial Finkel report, which was sparked by South Australia’s statewide blackout.

Renewable projects with battery backup, and others such as a pumped hydro plant at Cultana or a proposed solar and gas power station are the types of proposals that could stabilise the system.

In the wake of the September disaster, Chief Scientist Alan Finkel was tasked with reviewing the National Electricity Market. Labor has already indicated cautious support for its central plank, a low emissions (or “clean energy”) market.

Prime Minister Malcolm Turnbull with Chief Scientist Dr Alan Finkel.

That could mean that Australia will soon have an emissions plan with bipartisan support, after more than a decade of fierce political debate.

Energy Minister Josh Frydenberg was initially in favour of an Emissions Intensity Scheme.

While Dr Finkel said earlier this month that boosting renewables and controlling emissions intensity was the way to reach emissions reductions targets. And his initial report noted that both the Australian Energy Market Commission and the Australian Energy Market

Operator found “an emissions intensity scheme best integrated with the

electricity market’s pricing and risk management framework, had the

lowest economic costs and the lowest impact on electricity prices”.

However, partyroom dissent saw the EIS option ruled out and it is understood one of Dr Finkel’s recommendations will now be the new target.

The report will be discussed at a Council of Australian Governments meeting in Hobart.

The new target will mean electricity suppliers will have to source a proportion of their power from low-emissions sources. That will reportedly be a benchmark of up to 0.7 tonnes of carbon per megawatt hour, which will allow coal-fired power plants to keep operating for years but is likely to discourage investment in new coal plants.

The sort of project the target would favour would be the Eyre Peninsula pumped-hydro storage facility, or a proposal from ZEN Energy and Santos to build a solar power plant backed up by gas energy to ensure stability.

SA’s reliance on renewables has been blamed for instability in the system, which has then broadened into an argument about sourcing power from renewables versus baseload power sources, including coal.

In Adelaide on Thursday, Opposition Leader Bill Shorten blamed the Liberal Government for “climate change wars”, although both parties have seen infighting and policy shifts.

Mr Shorten wrote to Prime Minister Malcolm Turnbull to extend an “olive branch” on climate change policy.

“We are willing to work with the Government to find the best way forward,” he said.

“What is really important is that whatever is proposed tomorrow … unless it has a price signal on emissions, then it’s a waste of time. We will study the detail very carefully.”

Opposition climate change and energy spokesman Mark Butler said there would be many recommendations that were important for SA, for dealing with the security of the system and setting up new markets for different technologies, including battery storage.

He said the eastern states would be more affected by a target because of their low levels of renewables and high reliance on coal.

“SA is way ahead of those states in that respect,” he said.

Business SA said it was are looking for bipartisanship and “no kneejerk reactions”.