Australian solar disappointed by “tepid” Finkel review of energy market

Against the backdrop of high and increasing electricity prices Australia's energy policy landscape has been a highly contentious political battleground in recent years. Both sides of politics have used energy and climate change as issues with which they could wedge their opponents.

In this light, the review of the energy sector and transition towards a low-carbon economy prepared by Cheif Scientist Alan Finkel has been keenly anticipated by industry participants – particularly the country's burgeoning solar sector. However, in reacting to the report that was released today, the Australian Solar Council says that it has “not lived up to expectations.”

“Hopes were pretty high that it [the Finkel review] was an opportunity for an expert to take a view based on science and to provide a blueprint and long-term plan for Australia’s energy future,” the ASC's John Grimes said. “There was a high degree of optimism that what he [Finkel] would produce would be based on science, sound economic principles and good platform to transition.”

“It will take us some time to work through all of the detail, but against that backdrop, it could have been much more than what it turned out to be,” Grimes concluded.

In pointing towards positives, the CEO of the solar peak body noted that the report could provide a basis on which a bipartisan position could emerge. Australia's energy sector, including solar PV players, have long requested a policy environment that provides the stability needed to continue developing projects and making long-term strategic investments.

“The debate is toxic and polarized,” said Grimes. “We have to welcome every step forward.”

In saying this, Grimes believes that Finkel missed the opportunity to “bust the myth” that low carbon electricity and lower prices were mutually exclusive.

“The way to lower prices is lower emissions,” said Grimes, “if it's [the transition] done in an orderly fashion.”

Importantly for Australia's large scale solar sector, which is currently undergoing unprecedented growth, the Finkel report places the responsibility to shoulder some of the burdens, and cost, of grid integration onto developers. Grimes said that this is not the most efficient way to stabilize the grid as renewable penetration continues to increase.

“In relation to this idea [in the Finkel report] that new generators need to provide their own frequency control, some kind of battery alongside a new generator, in principle is a good idea, but it is not the most effective way of doing it,” said Grimes. “Instead of focusing on outcomes and then turning it over to the market to deliver, the report is too prescriptive.”