Australia: The roadmap to achieve 50% renewable energy by 2030 in the NT released.

The Northern Territory Government has released an expert panel report setting out the roadmap for renewable energy in the Territory as part of its election commitment.

On 27 November 2017 the NT Government released a Roadmap to Renewables for the Northern Territory: Fifty per cent by 2030 which maps out the foundations for achieving the NT Government's 50% renewable energy target for the Territory over the next decade.

Scope of review

As part of the NT Government's election commitment to achieve a target of 50% renewable energy by 2030 it commissioned the renewable energy Expert Panel to develop a roadmap and make recommendations for how the target could be achieved while maintaining the affordability of energy supply, and without compromising network reliability and security.

The Expert Panel was tasked with providing practical and viable options for achieving the NT Government's renewable energy target, including technical, financial, operational and economic issues associated with the options. The complete Terms of Reference are contained in Appendix 1 of the Report, however the Expert Panel was required to consider a range of key issues and barriers, including:

  • better defining the 50% renewable target that is measurable and achievable for Cabinet consideration;
  • the impact on NT households and businesses of implementing various options, including the likely cost and potential implications for how and when they consume electricity;
  • impacts of increasing renewable energy supply on regulated, unregulated and off-grid power systems;
  • impacts of renewable energy supply on power system security and taking into consideration the characteristics of Northern Territory power systems;
  • storage options for intermittent/renewable energy;
  • the scale of potential solutions (small-scale, residential, commercial or large-scale);
  • any necessary pre-conditions, policy settings or incentives that might be employed to encourage commercial investment in renewable generation and industry competition, and to encourage increased uptake of renewable energy by consumers;
  • options to attract investment and create jobs in the renewable energy sector;
  • possible impacts on existing funding or contractual arrangements in the Northern Territory;
  • options to enable low income, remote and renting households to participate in the transition to renewable energy;
  • community values and expectations;
  • options to promote efficiency and competition in the electricity supply industry in line with the objects of the Electricity Reform Act; and
  • regulatory and market arrangements, noting the Northern Territory is progressively adopting the National Electricity Law and Rules and is finalising the design of a wholesale electricity market mechanism to be implemented during 2017.

Excluded from the Expert Panel's review scope were:

  • developing a plan to implement or implementing government's preferred option(s);
  • liaising with or negotiating with the Commonwealth Government on renewable energy targets, industry arrangements, funding arrangements or policy settings;
  • broader climate change policy or potential greenhouse gas abatement or offset schemes;
  • strategies to displace or reduce the consumption of fossil fuels in transport;
  • facilitating enquiries from potential generation applicants; and
  • strategies to encourage energy efficiency or off-peak use.

It is understood from the Report that the Expert Panel considered a range of relevant local, national and international reports and briefs, along with 17 submissions from interested parties and discussions with key stakeholders including government departments and industry representatives, community interest groups, commercial entities, financiers and individuals.

Findings and recommendations

The Report states that as at 2017 it is estimated there is a 4% renewable energy penetration in the Territory, but that this can be increased to the NT Government's target of 50% by 2030 with careful planning, appropriate governance, effective regulation and policies to encourage investment.

The Expert Panel defined the 50% target for the purpose of the Report as the electricity consumed in 2030 inclusive of behind-the-meter generation, future self-generating enterprises and new large industrial consumers.

As part of its Report, the Expert Panel provided the following 11 recommendations for how the NT Government can achieve the 50% renewable target:

  • Recommendation 1 – Renewable Energy-Enabling of Economic Development: To ensure long-term benefits for all Territorians, the NT Government should include renewable energy as a central pillar of economic policy, maximising benefits of forthcoming disruptive change in the electricity sector caused by the global transition to competitively priced renewable energy.
  • Recommendation 2 – Align Policy Objectives: The NT Government should align its policy objectives, departmental activity and government programs toward the development and purchase of renewable energy-generated electricity.
  • Recommendation 3 – Certainty for Investors: The NT Government should actively create an environment that has policy certainty that attracts long term renewable energy investment and financing.
  • Recommendation 4 – Asset Optimisation: The NT Government should publicise an asset retirement/replacement optimisation strategy for existing gas-fired generators to facilitate the adoption of new, competitively priced renewable energy generation alternatives.
  • Recommendation 5 – Build Industry and Community Confidence: The NT Government should align regulatory and energy system reform to ensure congruence with the 50% renewable energy target and reposition current technical, legislative and social parameters to build community and industry confidence in the renewable energy industry.
  • Recommendation 6 – Support a Competitive Market: The NT Government should endorse a competitive energy and capacity market framework for renewable energy in the Northern Territory.
  • Recommendation 7 – Adaptive Regulatory Framework: The NT Government should develop a consolidated governance and regulatory framework that is able to adapt to new and emerging technologies.
  • Recommendation 8 – Validate Network Capabilities Ensuring System Security and Reliability: The NT Government should immediately improve knowledge of the existing capability and capacity of the entire power system, including its ability to accommodate new renewable energy generation. Where possible, the government should take immediate action to kick-start the rollout of renewable energy projects.
  • Recommendation 9 – Future System Planning: The NT Government should support the development of a detailed technical plan for the future power system, including reviewing the nature and requirement of demand, supply and transmission in the context of new technical and business models, while ensuring security and reliability as the nature of the system changes.
  • Recommendation 10 – Implementation of the Future Grid: The NT Government should optimise the implementation of existing plans for progressive network upgrades to facilitate the future grid required to support the transition to higher per cent of renewable energy.
  • Recommendation 11 – Engaging the Community: The NT Government should undertake a variety of community engagement measures to ensure inclusion of disadvantaged customers, training of the workforce, and education of the public regarding renewable energy.

The Report identifies the core and supporting enabling actions required to achieve each of the recommendations and the timeframes by which they should be implemented, namely short term (coming 12 months 2017-2018), medium term (over the following four years 2018-2021) and longer term (after prior recommendations or actions have been completed or external timeframes).

Next steps

With the release of the Report, the NT Government stated that it had accepted or accepted in principle the 11 recommendations from the Report and has announced the following commitments:

  • $750,000 will be provided to Power and Water Corporation to develop and validate a dynamic system model to ensure that increasing levels of renewable energy can be integrated into the grid in a stable and predictable way;
  • $4.5 million to be provided for co-contribution grants of up to $1000 to households to undertake energy efficiency measures such as installation of solar photovoltaic systems, batteries, solar pool pumps, smart meters, efficient lighting, solar hot water, energy efficient appliances, and efficiency audits. It is understood that further details will be provided in the coming months; and
  • financial and economic modelling required to implement the Report recommendations to deliver the cheapest possible power for households and businesses, and minimises the need for taxpayer investment.

Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this bulletin. Persons listed may not be admitted in all states and territories.

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