The Independent Chair of the Energy Security Board (ESB), Kerry Schott, hosted a 45 minute Webinar this morning to provide further detail on the National Energy Guarantee (NEG). There was no new information provided in the 45 minute webinar, nor was there clarification provided on key concerns that have been raised to date. The Independent Chair suggested that the NEG will be underpinned by the behaviour of retailers to seek the lowest cost blend of generation to meet their energy blend requirements (low emission and dispatchable). Whilst not voicing express concern on the potential market power of the large Gen-tailers there was a tone of apprehension, particularly for SA where AGL is dominant.
In respect of the RET, it remains unclear whether or not renewable generation that comes online post 2020 will be eligible to receive LGCs, at this stage it appears very unlikely that they will be however this is yet to be confirmed. Renewable generators in existence prior to 2020 will be eligible for LGCs until 2030, unless there is a change in the legislation.
When asked about the functionality of the financial contracts markets and how these would operate when there are now physical requirements in respect of generation blend, Kerry Schott was unable to provide any clarity. The lack of clarity on this change is concerning as the potential complexities appear not to have been considered by the ESB.
