But a national agreement is showing signs of fracturing, and states are refusing to include fossil fuels in the back-up market.
All existing electricity generators – including coal and gas – should be paid to be on standby to avoid blackouts and bolster the stability of the east coast power grid, the Energy Security Board says in its response to the energy crisis.
In the worst winters, Victoria would need to cover its “variable renewable energy” deficit of about 1 Terawatt hour of electricity by firing up back-up dispatchable generation, by reducing demand or relying on power from other states.But Victoria reiterated again on Sunday that it would refuse to draw on fossil fuels as part of the capacity mechanism.
The capacity mechanism “will not alter, or limit, the principle that jurisdictions must be able to determine which technologies are eligible for participation in a capacity mechanism in their region,” the ESB stated in its 84-page consultation paper, to be released on Monday.
Grattan Institute energy program director Tony Wood has previously said he had never heard of a capacity mechanism that did not include coal and gas.“You can’t firm up renewables with renewables. It’s got to be something available on demand. Solar is not: you can’t get solar at night. You can’t get wind when the wind is not blowing.”the mechanism could prolong the life of coal power stations, she has said it could be designed to exclude coal but must include gas.
“The ESB will explore potential hybrid models where retailers take on some role in forecasting their own needs and procuring for them, from a pool of capacity procured by AEMO. This hybrid approach could increase the transparency of retailers’ forecasts relative to AEMO’s and the associated differences in costs to consumers.”
“Labor is foolishly trying to turn this into a debate about pitting technologies against each other,” Mr O’Brien said.
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