Modelling of a Clean Energy Target mechanism

07 August 2017

The governments of South Australia, Queensland, Victoria and the Australian Capital Territory have tasked the AEMC with developing design options for a Clean Energy Target (CET).

The Commission will test a range of CET designs. In particular we will examine the ability of different schemes to achieve energy and emission reduction policy objectives in the face of changing and uncertain future consumer demand; input prices and technology costs.

A final report is due by October 2017.

Background

In October 2016 COAG energy ministers agreed to an independent review of the national electricity market to take stock of its current security and reliability and to provide advice to governments on a coordinated, national reform blueprint.

The Independent Review into the Future Security of the National Electricity Market’s final report was presented to the COAG leaders’ meeting in June 2017. It recommended a Clean Energy Target as the most credible and durable mechanism for driving clean energy investments to support a reliable electricity supply.

The governments of South Australia, Queensland, Victoria and the Australian Capital Territory have subsequently requested that the AEMC investigate a number of design issues and options for a CET, including differing emissions reduction trajectories, interaction with the existing Renewable Energy Target and the adaptability of the mechanism over time.

The AEMC’s advice will take into account the potential impact of a CET on the liquidity of wholesale markets and the supply and demand balance. It will also consider whether appropriate frameworks and incentives are in place for network investment, and investment in energy storage and other newer technologies.

 

For further information, contact:

Communications Director, Prudence Anderson, 02 8296 7800