Norton Rose Fulbright issued a response to the Finkel review (Finkel) earlier this month, led by the firm’s global head of energy Simon Currie.
“Overall I feel the panel hasn’t managed to catch the excitement and dynamism that is driving our industry forward or convince the readers that there is a lower cost sustainable energy ecosystem just around the corner,” Mr Currie said.
“It is now up to all of us to deliver that message.”
The report coincided with the release of the 2017 Lowy Institute Poll, which found that climate change is a growing concern for Australians. Fifty-seven per cent of Australians believe climate change is a critical threat to Australia’s vital interests and 81 per cent want the government to focus on renewables, according to the Lowy Institute.
Elisa de Wit, who leads NRF’s Australian climate change practice, said that even if the government adopts Finkel’s recommendations Australia will not meet its commitments under the Paris climate agreement.
“Should the government adopt the electricity sector pathway recommended, then Australia would not be able to meet its obligations under the Paris agreement because it is inconsistent with the 2ºC goal, let alone the ‘well below 2ºC’ or 1.5ºC,” she said.
“In particular, not requiring the electricity sector to do more would mean that a higher burden is placed on other parts of the economy, which would result in higher costs and slower action in terms of Australia’s Paris targets. It also risks locking in fossil fuel-intensive infrastructure which will be at risk of becoming stranded in the future, with associated economic and social costs.”
The future of Australia’s energy market depends on co-operation between regulators and various levels of government, according to NRF.
“The need for better coordination between regulators and interested parties is a familiar international refrain,” said Claire Forster, special counsel, competition and regulatory.
“Joining up the gaps between those responsible for grids, generation policy, licencing, consumer protection and even financial markets regulation will be important in an ever more complex world.”
Rebecca Hoare, a Brisbane-based partner in the firm’s environment and planning and climate change practices, added that agreements between Australia’s federal, state and territory governments are needed to drive Australia’s movement to clean energy and renewables.
“The Finkel review recommends that the federal, state and territory governments agree to a national emissions reduction trajectory and a national strategic energy plan.
“What interests me in particular is the interplay between the call for national agreement and the individual initiatives of the various state and territory governments, in particular the Queensland government’s 50 per cent renewable energy target by 2030.
“The recently released Powering Queensland Plan affirms this commitment and foreshadows the establishment of a government-owned generator (referred to as ‘CleanCo’) to operate existing renewable and low-emissions energy generation assets and develop new renewable energy generators.”
On the other side of the equation, NRF welcomed Finkel’s emphasis on the integration of consumer systems into Australia’s clean energy generation.
“Finkel’s recognition of the importance of consumer integration into the solutions is very well-received,” said power and renewables senior associate Kelly Davies.
“The rapid decline in price for delivery of alternatives to traditional generation and consumer ‘bill shock’, as they are faced with heavy increases in their consumer tariffs, is already crystallising into the delivery of alternative solutions. From large industrial users and national commercial businesses to local councils and individual households, consumers are driving innovation.”
Mr Currie concluded that although Finkel is “light on detail”, the Australian energy market has a sense of its own direction.
“Full implementation is likely to take years to achieve, but fundamental market reform is being implemented in other jurisdictions over similar time frames,” he said.
“Australia will be able to rise to the challenge. Above all, doing nothing is no longer an option, so be prepared for significant developments in the electricity sector over the coming months and years.”