Shell Australia chief executive Greg Joiner said a capacity mechanism should be kept as simple as possible to avoid unintended consequences which will push up prices.
The Energy Security Board’s proposed capacity mechanism could create unintended consequences for the energy grid and push up power prices for consumers, according to Shell Energy.
“We proposed that a central buyer would procure sufficient new capacity through cap contracts to address any forecast reliability shortfalls in the market,” Shell said in its submission to the ESB. “It seems to be the mechanism to get to the outcome with minimal investment and cost,” Mr Joiner said.“Ultimately, customers will bear the risks of poor design choices in the form of higher costs and may see little meaningful improvements to reliability.”
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