Origin Energy has called on the federal government to move quickly to ensure energy security and affordability by supporting an emissions trading scheme and tweaking the existing National Electricity Market mechanism.
Origin chief executive Frank Calabria on Tuesday urged the Turnbull government to adopt a national, integrated approach to the energy sector, and said investment in renewables was increasing despite the absence of bipartisan agreement on national climate policy.
“Today, Origin joins a a growing chorus of companies calling for the government to put an emissions intensity scheme for the electricity sector back on the table,” he said in a speech at a Committee for Economic Development of Australia (CEDA) event in Sydney.
“Now’s the time to put aside ideological differences and make some important decisions.”
The federal government has a target of ensuring 23.5 per cent of the energy mix comes from renewables by 2020, but has resisted putting in place a carbon trading scheme, under pressure from some of its conservative members.
An emissions trading scheme would have low impact on electricity prices, would provide an incentive for investment in low-carbon electricity and promote the winding down of high-emission coal generation, Mr Calabria said.
“Unfortunately this mechanism has been ruled out by the government, despite widespread support from the energy industry and others,” he said.
Mr Calabria said Australia’s energy system was under pressure as a result of poor policy and regulatory decisions over the past decade, which were now hurting households and businesses across the country.
He also advocated changes to the National Electricity Market – which covers eastern Australia – to adapt to rising renewable energy supply, while ensuring sufficient coal and gas power was available.
This could be done by ensuring sufficient coal and gas generation is physically made available at all times to offset the high level of variation in renewable energy generation, he said.
Ancillary service markets to keep voltage and frequency stable also need to be developed quickly, while there also needs to be focus on distributed generation and storage.
Mr Calabria also asked governments to lift barriers on gas exploration and development , saying the country had enough resources available to boost production and put downward pressure on prices.
He also suggested that export-focused liquefied natural gas projects had the capability and infrastructure to provide supply for the domestic market.