National Energy Guarantee
In October 2017 the Energy Security Board (ESB) provided the COAG Energy Council with advice
on changes to the National Electricity Market (NEM) and legislative framework. The proposed
national energy guarantee (Guarantee) aims to support the provision of reliable, secure and
affordable electricity with a focus on ensuring:
the reliability of the system is maintained
electricity sector emissions reductions needed to meet Australia’s international
commitments are achieved
the above objectives are met at the lowest overall costs.
The Guarantee is a way to encourage new investment in clean and low emissions technologies
while allowing the electricity system to continue to operate reliably.
To deliver this transition, the Guarantee requires retailers to contract with or invest in generators or
demand response to meet a minimum level of dispatchable ‘on demand’ electricity where there is
an identified gap . Retailers must also keep their emissions below an agreed level.
The Guarantee is designed to integrate energy and emissions policy – both energy and emissions
targets are reflected in a single energy price. That energy price will signal how much electricity the
market needs and when it is needed, while also reflecting the cost of meeting Australia’s
emissions targets.
Request for further analysis on the Guarantee
In October 2017 the ESB was asked by the Commonwealth government to provide a report,
including modelling analysis, on the Guarantee. This work, led by the Australian Energy Market
Commission, was an input to discussions at the COAG Energy Council meeting in November
2017. On 10 November 2017 the Energy Security Board held a live webinar on the NEG. A
recording of the webinar (approximately 45 minutes) is now available here.
Consultation paper for draft design of the Guarantee
On 24 November 2017, the COAG Energy Council agreed that the Energy Security Board should
provide further advice on the Guarantee. This is to be provided in April 2018, after broad
consultation. On 15 February 2018 the ESB published a consultation paper for the draft design of
the Guarantee. This consultation paper has been prepared by the ESB to facilitate public
consultation on the highlevel
design of the proposed Guarantee and to seek stakeholder
submissions. More information on the consulation paper can be found here.
This consultation process has now closed. Whilst the ESB would endeavour to accommodate
submissions received after 8 March 2018, please note that the ESB has limited time for
consideration of submissions in order to provide advice to the COAG Energy Council between the
submission date of 8 March 2018 and April 2018.
All Submissions, subject to any claims of confidentiality, have been published here.
Initial design of the Guarantee
The ESB presented a high level design of the Guarantee to the COAG Energy Council on 20 April
2018 following a two month consultation process and the review of more than 150 submissions
received from a broad range of groups and individuals.
The ESB thanks all those who have taken the time to submit high quality viewpoints based on
expertise and operational experience, and now look forward to gaining Ministerial insights on this
design.
It is anticipated that the ESB will undertake further consultation from May to July 2018 before
proceeding with the final design of the Guarantee.
More information on the ESB can be found here.