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Shane Rattenbury MLA

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Shane Rattenbury MLA Shane Rattenbury MLA Member for Kurrajong Minister for Climate Change and Sustainability Minister for Justice and Consumer Affairs Minister for Corrections Minister for Mental Health 17/07100 Ms Peggy Danaee Committee Secretary House of Representatives Standing Committee on the Environment and Energy Inquiry into Modernising Australia's Electricity Grid [email protected] cc: Mr Andrew Barr MLA, Chief Minister Dear Ms Danaee Thank you for your letter of 3 March 2017 regarding the House of Representatives Standing Committee on the Environment and Energy Inquiry into ModernisingAustralia's Electricity Grid. I welcome this inquiry. The following observations follow from the ACT's experience from implementing a pioneering energy policy agenda that is among the most ambitious in the-world. The absence of a clear, national, long-term energy and emissions reduction policy is perpetuating investment uncertainty. This uncertainty is contributing to rising wholesale electricity prices and is exacerbating power system security risks. Energy sector assets are long-lived investments and efficient investment in renewable and conventional generation systems and transmission and distribution infrastructure will be delayed until a long-term carbon policy framework is in place. The ACT Government has held the long-term policy position, since the release of its Climate Change Action Plan 2 in 2012, that a national, technology-neutral and economy-wide emissions trading scheme is the lowest cost way to achieve a given emissions reduction target. The ACT Government strongly supports the current review process being led by the Commonwealth Chief Scientist, Dr Alan Finkel AO, which seeks to develop a blueprint for reform of the National Electricity Market (NEM}. Establishing a long-term policy framework will provide the investment certainty necessary that will enable the transition of the sector to a decarbonised electricity system and allow Australia to meet its Paris Agreement climate commitments. Con'sumerchoices and behaviour are having an increasingly important influence on the electricity network, which will have significant consequences for network investment and future business models for network businesses. For example, the Power of Choice program of energy market reforms is designed to provide consumers with improved information and choice, and enable the greater uptake of demand-side options that help consumers manage their electricity consumption. AUSTRALIAN CAPITAL TERRITORY LEGISLATIVE ASSEMBLY London Circuit, Canberra ACT 2601, Australia GPO Box 1020, Canberra ACT 2601, Australia Phone +61 2 6205 0005 Email [email protected] 'tj#'@ShaneRattenbury IJshanerattenburymla The ACT Government is a leader among Australian jurisdictions when it comes to implementation of the Power of Choice reforms. Cost-reflective network pricing will be implemented in the ACT on a customer 'opt-out' basis from 1 July 2017. The transition to cost reflective network tariffs is designed to more adequately reflect the true costs of electricity supply to consumers in order to encourage greater demand response at peak times, including through the integration of emerging technologies. Unfortunately, state and territory governments are not introducing cost reflective network tariffs via a consistent approach, which has the potential to undermine the effectiveness of the reforms. Network tariff reform and consumer responses have the potential to shift consumption and avoid unnecessary further investment in electricity networks to cope with demand at peak times. The transition to cost reflective tariffs recognises the collective effect that consumer energy choices can-and will-have on investment and the operation of the electricity system. The future role of energy storage to support the transition to a modernised electricity supply system has been acknowledged by many respected analysts, including the International Energy Agency. Energy storage technologies have the potential to not only complement electricity systems with a high proportion of renewable electricity generation, but to also provide services to network operators that support power system security and reliability and reduce the need for further network investment. The ACT Government has recognised the importance of energy storage and has established the $25 million Next Generation Energy Storage Grants program, which will support the roll out of more than 5,000 solar battery storage systems to 2020 in Canberra homes and businesses. These systems will also collect critical data to inform industry research and development, and will be capable of responding to future network price signals. The ACT Government is further pursuing alternatives to traditional cycles of electricity network upgrade and investment. The ACT Government is working with leading industry players to develop innovative technology demonstration projects in this field that are directly relevant to the committee's inquiry. As part of their successful proposal in the ACT Government's second wind auction in 2016, CWP Renewables are investing $3 million in a world-leading zero carbon micro­ grid to be developed at the Canberra Institute of Technology in Bruce. This forms part of a $33 million investment in local micro-grid initiatives with strong trades training and research integration. CWP Renewables are further investing $35 million to develop an Asia-Pacific micro­ grid export hub in the ACT. These initiatives highlight the leadership position of the ACT Government I hope you find this information of assistance to the inquiry. Officials from the Environment, Planning and Sustainable Development Directorate (EPSDD) are available to provide more information should the inquiry wish to seek greater details on the ACT's experience and policies that support the transition of the electricity sector. Yours sincerely 7 Shane Rattenbur� zoi Minister for Climate Change and Sustainability .
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