Finkel Report fails to spark short term price rise optimism
The long awaited Finkel Report was released this afternoon bringing clarity and a ‘blueprint’ to fixing the ailing National Electricity Market (NEM).
The review reinforced what the Chamber of Commerce and Industry Queensland (CCIQ) has been calling for by confirming Federal and State Governments must work together to fix Australia’s energy crisis.
In the past 12 months alone Queensland small businesses have been crippled by rising electricity prices. After an 11.2 per cent price increase they are now facing a further 4.1% rise. Over 500 businesses have been disconnected this year alone with no relief in sight.
The Report has focused on fixing the NEM in the medium to long-term, calling for better planning, governance and infrastructure to transform the grid to be modern, secure and reliable.
CCIQ welcomes the report and its recommendations which will provide all levels of government the roadmap it has so desperately needed and been incapable of finding to make the NEM efficient and eventually cost effective.
“What was disappointing in the report, yet unsurprising, is the absence of immediate actions to bring prices down.” Kate Whittle, General Manager of Advocacy says.
“Queensland small businesses have reached a breaking point, and not enough is being done to provide price relief right now.”
“We have been calling for market reform and for government harmonization, so it was rewarding to see Dr Finkel echoing our sentiments. This is a national problem which requires a national approach.”
A Clean Energy Target, hoping to bring clarity to the market and end investor uncertainty, coupled with greater transparency of generator retirement and investment is tipped to reinvigorate investment, boosting the economy.
“We quickly discovered that beyond the cost of gas, uncertainty around emissions reduction policies was pushing up prices and undermining reliability.” Dr Finkel says.
“Queensland needs to come together with the federal government to work towards a cohesive emission policy.” Ms Whittle affirms.
The Report has taken long game approach. Any cost benefits and grid security will not be seen for over five to ten years. “This report has focused on security and reliability. Small businesses are not worried about reliability because at this rate they won’t be able to afford to be on the grid, reliable or not.”
“Small businesses will be disappointed. Governments need to take immediate action within the framework of the report to achieve price relief.”
“This report does not help solve the immediate affordability crisis.”
The report is encouraging reduced usage and smarter distribution. Currently CCIQ is running in partnership with the Queensland government the ecoBiz initiative which helps businesses reduce their energy consumption by up to 35%.
CCIQ has provided the State Government with recommendations in its State Budget Submission to immediately give price relief by:
- Introduce competition to Regional Queensland.
- Reduce revenue from transmission and distribution networks.
- End the Solar Bonus Scheme.
- Continue funding education initiatives, such as CCIQ ecoBiz.