Government Response

NT Government Response to Recommendations of the Roadmap to Renewables report.

Assessment:

  1. The recommendations have been evaluated individually, with the recommended response from Government included in the following table.
  2. There are two types of responses recommended:
    1. Support – the recommendation aligns with Government responsibilities and policies; and
    2. Support in-principle – the recommendation partially aligns with Government responsibilities and policies and/or needs further analysis and refinement.
  3. It is recommended that all core and supporting enabling actions included in the report are noted.  Further analysis is required to assess the feasibility of all suggested actions, and their alignment to the Government’s policy objectives.
Recommendation Recommended Response
Renewable Energy – Enabling of Economic Development: To ensure long-term benefits for all Territorians, the Northern Territory Government should include renewable energy as a central pillar of economic policy, maximising benefits of forthcoming disruptive change in the electricity sector caused by the global transition to competitively priced renewable energy.

Support

The Economic Development Framework identified renewable energy as a Developing Sector. The driver of economic development, however, is energy, not just renewable energy.

The Energy Policy for the Northern Territory (currently being developed) will include renewable energy and will focus on ensuring Territorians benefit from secure, reliable and least-cost energy supply. This will have benefits for economic growth, sustainability and liveability of the Northern Territory.

At any time, Territory businesses may be able to grow and diversify by capitalising on renewable energy technologies to provide their industry’s energy needs.

Align Policy Objectives: The Northern Territory Government should align its policy objectives, departmental activity and government programs toward the development and purchase of renewable energy-generated electricity.

Support

While government will seek to utilise renewable energy, subject to its availability and ability to deliver secure, reliable and least-cost electricity, policy initiatives will need to be carefully managed to avoid unintended consequence such as price increases for other electricity consumers.

Government will seek to ensure that all relevant policies, programs and activities by its agencies support its renewable energy strategy, while also aligning with other policy objectives.

Certainty for Investors: The Northern Territory Government should actively create an environment that has policy certainty that attracts long term renewable energy investment and financing.

Support

This recommendation aligns with Government’s economic policy to increase private sector investment to grow jobs.

Policy and regulatory certainty and transparent information about investment opportunities reduces risks and will create opportunities for the private sector to invest in renewable energy.

The Renewable Energy Implementation Plan will define a pathway to achieve the target by 2030, addressing market design, the regulatory framework, mechanisms to achieve the target, and their costs and benefits.

Asset Optimisation: The Northern Territory Government should publicise an asset retirement/replacement optimisation strategy for existing gas-fired generators to facilitate the adoption of new, competitively priced renewable energy generation alternatives.

Support in-principle

The annual Power System Review published by the Utilities Commission provides information on projected demand and supply for the following ten years.

Scenario modelling taking into consideration projected demand and supply will provide information to optimise the retirement strategy for existing assets.

A Government decision on the future market, and role of Government Owned Corporations will be made in due course.

Build Industry and Community Confidence: The Northern Territory Government should align regulatory and energy system reform to ensure congruence with the 50 per cent renewable energy target and reposition current technical, legislative and social parameters to build community and industry confidence in the renewable energy industry.

Support

The Renewable Energy Implementation Plan will play an important role in shaping industry and community confidence that the target can be achieved while also delivering secure, reliable and least-cost electricity.

It will be important that the reform process encourages investment in all parts of the energy sector, including renewable technologies, based on the true cost and overall benefit to the Northern Territory.

Any misalignment between the financial return for investors and the economic impact on the energy system will affect network security and increase overall costs to consumers and taxpayers.

Support a Competitive Market: The Northern Territory Government should endorse a competitive energy and capacity market framework for renewable energy in the Northern Territory.

Support in-principle

Further analysis, and a decision by Government on the design of the future electricity market will inform the framework for new generation. These will consider the National Electricity Rules, lessons learned in other comparable jurisdictions, the Territory’s specific circumstances, and the Government’s renewable energy target.

Final market arrangements for the Northern Territory will apply to all sources of electricity, not just renewable energy.

Adaptive Regulatory Framework: The Northern Territory Government should develop a consolidated governance and regulatory framework that is able to adapt to new and emerging technologies.

Support

The design and progressive implementation of regulatory frameworks for the Northern Territory’s three regulated electricity markets is underway.

These regulatory reforms are technology neutral, allow for an adaptable electricity sector, and will remain relevant in the context of evolving technology, knowledge and experience.

Validate Network Capabilities Ensuring System Security and Reliability: The Northern Territory Government should immediately improve knowledge of the existing capability and capacity of the entire power system, including its ability to accommodate new renewable energy generation. Where possible, the government should take immediate action to kick-start the rollout of renewable energy projects.

Support in-principle

Under current regulations, Power and Water Corporation (PWC) has responsibility for managing the technical planning for the Northern Territory’s electricity systems.

The Government will provide funding to enable PWC to lead development and use of a validated dynamic network model for NT electricity systems to improve knowledge and avoid actions which could jeopardise system security and reliability.

The results of this modelling will facilitate decisions to be made about the scale and location of any new generation capacity.

The timing and sequence of the roll-out of potential renewable projects needs to be carefully considered to ensure system security and reliability is maintained.

Future System Planning: The Northern Territory Government should support the development of a detailed technical plan for the future power system, including reviewing the nature and requirement of demand, supply and transmission in the context of new technical and business models, while ensuring security and reliability as the nature of the system changes.

Support

The development of technical plans for Northern Territory electricity systems, focused on delivering secure, reliable and least-cost electricity is the responsibility of PWC.

The plan will be informed by the results of dynamic network modelling and scenario modelling.

Implementation of the Future Grid: The Northern Territory Government should optimise the implementation of existing plans for progressive network upgrades to facilitate the future grid required to support the transition to higher per cent of renewable energy.

Support in-principle

The need and priorities for network transmission and distribution upgrades and augmentation over the long term will be addressed through PWC’s network planning function.

The Northern Territory needs to be cognisant of national arrangements and settings relevant to electricity networks.

Engaging the Community: The Northern Territory Government should undertake a variety of community engagement measures to ensure inclusion of disadvantaged customers, training of the workforce, and education of the public regarding renewable energy.

Support

Increasing community awareness will support the take-up and integration of renewable energy and potential demand management strategies by households and small business.

The Renewable Energy Implementation Plan will include a communication strategy. Energy suppliers and service providers will be encouraged to communicate with their customers about options for energy supply and management.

Analysis is required to assess costs and benefits of measures for disadvantaged customers and to determine the extent of the role of government in addressing this recommendation.