Day 82: 'Tense and theatrical'
An introductory weekday newsletter from Schwartz Media. Counting the days since Australia had an energy policy.
Good morning and welcome to day 82.
Today in summary: The ESB seeks feedback on its draft retailer reliability bill; the AER approves distributor tariff hikes in Victoria, ahead of its market offer price paper release; and CKI’s bid for APA Group could still succeed if the company finds a non-Chinese partner.
— Sophie
Today’s policy spin level: 💨💨💨
Please don’t keep Australian Energy Daily to yourself. Forward this email to your colleagues and encourage them to sign up for free here.
As agreed at the latest COAG meeting last month, the Energy Security Board has drafted an amended bill for a retailer reliability obligation, and is seeking stakeholder feedback by November 22nd before it delivers a final draft bill back to COAG in December. From the August draft bill, the ESB has removed the emissions reduction requirement, objective and civil penalties, and changed how the reliability obligation would operate.
Power prices will rise for most Victorians after the Australian Energy Regulator approved distributor tariff increases from January 1. Over a year, the typical residential customer will pay up to A$30 more due to the changes. Today, the AER is set to release a consultation paper on the default market offer price mechanism it is developing on instructions from the federal government.
CKI Group’s bid for APA Group, which was blocked by the government this week on national security grounds, could succeed if the Hong-Kong-based company partners with a non-Chinese company or sells assets, reports Fairfax. There’s still two weeks for a final decision to be made on the A$13 billion bid, and sources told Fairfax the offer could be modified to address concerns about excess foreign ownership of Australia’s gas pipelines.
The Commentariat
Capacity payments were the hot topic of conversation at the second of Energy Minister Angus Taylor’s roundtables in Sydney yesterday. While the first meeting, solely with retailers, was “tense and theatrical”, the afternoon session with representatives from across the industry was impressive, writes the AFR’s Matthew Stevens.
“The Energy Minister gave good hearing to delegations from the very old, the very new, the incumbents and the wannabes. And each time he was asked for insights in the government's thinking, he deferred to those delegations saying he was there to listen, learn and assess.”
However, RenewEconomy’s Giles Parkinson reported his sources said the conversation had been dominated by Vales Point coal station co-owner Trevor St Baker, and industry is lobbying for capacity payments as the proposed reliability obligation won’t protect coal from spot market price exposure.
“According to those present, Taylor had planned to break the meeting into orderly sections about mechanism, bankability, merit criteria and implementation, but as one observer noted, “it quickly turned into an unstructured mess.”
Three more things
Tesla director Robyn Denholm will replace Elon Musk as board chair, requiring her to leave her position as CFO and head of strategy at Telstra. Denholm, who joined Tesla’s board in 2014 as an independent director, is considered a company insider who is across Tesla’s growing auto and energy businesses.
Australia has fallen from fifth to sixth place in EY’s biannual Renewable Energy Country Attractiveness Index, while Germany and the UK have also fallen one spot. The index blames an uncertain political climate characterised by US-China trade disputes and decreasing subsidies for renewables for the shifts, and in Australia’s case, “the most anti-renewables politician yet” in federal energy minister Angus Taylor.
Victorian Premier Daniel Andrews has announced a Labor campaign promise to subsidise solar panels for up to 50,000 rental properties, ahead of the state election on November 24th. The plan adds to tenant-friendly legislation passed during parliament’s last sitting week, and is the next element in Labor’s suite of renewable energy proposals, through which it wants to increase Victoria’s clean energy generation to 50% by 2030.