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A new, national, market-based 40 per cent Gas Energy Target (GET) scheme has been proposed by Australia’s largest private energy company, ERM Power, that would double the emissions reduction target of the 20 per cent RET scheme, with minimal impact on electricity prices.
The proposal comes amid speculation of the Prime Minister calling a federal election within days and the Government’s announcement of its revised carbon policy expected this week.
ERM Power chairman Trevor St Baker said the scheme would securely transition Australia to a low-carbon economy.
“The deferral of the government’s CPRS and ETS exacerbates the challenges the industry is facing in developing essential new generation capacity,” said Trevor St Baker.
“The incentivation of gas power would mean the most cost effective and efficient way to achieve targeted emission reductions in the coming transitional years, through positive incentive rather than increased costs on industry and consumers.
“Gas-fired generation is the only viable option to coal necessary to meet the expected 25 per cent growth in electricity demand for base-load and intermediate generation over the next decade.”
A national GET scheme would attract a $20 billion cost for new gas-fired generation (in AUD2010 terms) to deliver the 40 per cent target by 2025, plus the $10 billion in gas-fired generation to back up intermittent wind generation that is likely to be developed under the 20 per cent RET scheme.
The National 40 per cent GET scheme, similar to the 20 per cent RET and Queensland 18 per cent GEC schemes, would provide the flexibility and necessary economic price signal for the development of new base-load and intermediate generation sought by the Energy Supply Association.
"Australia has world class gas reserves capable of complementing renewable energy in meeting the growth in demand and capacity to replace retiring coal-fired generators.”
Mr St Baker said that notwithstanding the government’s renewable energy initiatives, Australia would be at a loss if gas energy was not a component in climate change policy.
“Wind, solar and geothermal cannot in the medium term provide for Australia’s base load or intermediate energy needs alone.”
Benefits of the scheme include regional economic development, low administration costs, low price impact for consumers, no compensation by governments, and no barrier to alternate policies to reduce emissions.
The proposed 40 per cent GET scheme is similar to the Queensland 18 per cent Gas Energy Certificate (GEC) Scheme which achieved a 10 per cent reduction in carbon pollution over the past six years from electricity generation in Queensland, and also similar to the Federal 20 per cent RET Scheme.
Gas-fired power stations developed by ERM Power at Braemar 1 and Braemar 2 are accredited under the Queensland 18 per cent GEC and are incentivated to operate at base load for up to 15 hours per day on gas, and have contributed along with other new gas-fired generators to the overall 10 per cent reduction in CO2 emissions in the State.
A two-page brief on ERM Power’s national market-based 40 per cent Gas Energy Target (GET) option is available here.
For further information please contact:
Contact: Margaret Lawson - Cole Lawson Communications
(07) 3221 2220
0419 643 243