New policy hub to tackle 'vested interests' in energy sector
Summary: Australia's energy debate needs greater scrutiny and independent economic analysis, according to the head of a new policy centre to be launched this week in Melbourne.....
(Pictured: Bruce Mountain will head the new Victorian Energy Policy Centre. Photo: Wayne Taylor)
The Victorian Energy Policy Centre, to be based at Victoria University, will examine consumer protections, market trends and the development of the energy industry.
"It will look towards building the energy systems of the future, not [focused] on propping up the failing policies of the past," the office of Lily D'Ambrosio, Victoria's Energy Minister, said in a statement.
Bruce Mountain, director of Carbon and Energy Markets consultancy and the head of the new centre, said the hub would also examine emissions reduction policies and their implications for the industry.
"There is a deficit of rigorous, economic thinking in Australia’s energy policies," Dr Mountain told Fairfax Media ahead of Wednesday's formal opening of the centre.
Policy development would benefit from analysis that reflects "an understanding of the world as it is rather than as some might imagine it should be", he said.
With the Turnbull government hoping to secure the approval of its National Energy Guarantee (NEG) in time for an August 10 meeting of energy ministers in Sydney, the centre may provide some alternative perspectives on the policy as officials race to meet the deadline.
The federal government needs unanimous support for the NEG. It aims to meet the three goals of reducing electricity prices while improving reliability of the grid and driving a 26 per cent reduction in sector emissions on 2005 levels by 2030 in line with the lower end of Australia's Paris climate pledge.
Critics of the design say the National Electricity Market is likely to deliver that carbon pollution goal with little additional effort, potentially locking out a much faster take-up of renewable energy than could be achieved.
"I think the centre is well placed to contribute to the debate on the NEG," Dr Mountain said. "I should imagine the policy is very far from settled."
The Victorian government - which will tip in $1.75 million to set up the centre - has been dissatisfied by the quality of analysis of the energy industry in the public arena so far.
“The energy debate is often dominated by vested interests - what we need is more independent, credible voices," Minister D'Ambrosio said.
Victoria will be a key focus of the centre as the Andrews Labor government proceeds with its legislated targets of sourcing 25 per cent of its electricity from renewable energy by 2020 and 40 per cent by 2025.
"Our funding agreement requires us to undertake a number of studies for the [Victorian] government in addition to our contribution to academic outputs," Dr Mountain said.
"Energy policy in Victoria will be a particular consideration but in many cases this will require broader perspectives," he said.
Alan Pears, an energy specialist at RMIT University, said he expects the new centre to "apply a stronger ‘public interest’ and progressive economics perspective to energy issues than most analysts have to date".
"I would like to see them do more work on the fundamentals of potential of energy efficiency and productivity improvement, going beyond the limited supply side and ‘demand response’ focus of dominant energy policy," Mr Pears said.
The launch of the new centre, which will also be backed by $480,000 in initial funding from Victoria University, comes as established outlets such as the Grattan Institute scramble for additional money.
"We call out shonky research and the special pleading of interest groups. This work has never been more important," John Daley, chief executive of the Grattan Institute, said in an appeal for donations last month.
"But we need your help," he said in an email. "To fund our work, we are drawing down on the endowment that makes Grattan independent, and that independence is crucial to Grattan’s success."