Australia has for many years enjoyed the comparative advantage of relatively low-cost electricity generation, but that advantage has declined in recent years because of emissions-reduction policies, the investment required to meet growing demand, and natural gas prices increasing towards parity.
A major challenge facing countries around the world, including Australia, as they seek to reduce their emissions is how to develop and implement policies that will deliver a transition to a low-emissions energy future while maintaining an adequate, reliable and competitive energy supply.
Market forces and enabling regulatory regimes should be the main mechanisms, but policies, programs and regulatory mechanisms that support the development and deployment of new technologies will also be crucial. Ensuring that those new technologies can be integrated into existing supply chains in a way that minimises disruption is a particularly difficult challenge.
We need supply systems and market measures that deliver reliable, competitive, low-emissions electricity, and electricity market reform to support investment in low-emissions electricity supply capacity appropriate to meeting the reliability, economic, environmental and social needs of consumers, suppliers and governments.
Australia is transitioning from a limited number of large power generation plants to a...
