large number of nonsynchronous variable renewable electricity generators, wind and
solar (Finkel Review 2017), have come online in recent years – totalling 4644 MW
across QLD and NSW (QLD Government 2018; NSW DPE 2018b) – as a result of
decreased capital costs. This nonsynchronous variable generation has not only added
an increasing number of decentralised energy generation to the NEM, but the
vertically integrated grid is not well equipped to handle the rapid change. In addition,
new products, processes and business models have come to the market – from the
generation of electricity through to its end use (Finkel Review 2017) – that consumers are looking to satisfy their energy needs.
Finally, there is a distinct political dimension of the COAG Energy Council and
member jurisdictions setting their own priorities concerning sources of electricity
and greenhouse emissions or low carbon. For example, in response to climate
change, the Australian Government has committed to reduce its greenhouse gas
emissions by 26–28% below 2005 levels by 2030 under the 2015 Paris Agreement
(Australian Government 2015). NSW has a net emission target of zero by 2050 and
prior to this had developed a ‘Renewable Energy Action Plan’ which referenced a
previous Federal target of 20% renewables by 2020. QLD on the other hand has a
50% renewable target by 2030. Some years prior to this commitment, States and
territories had set for themselves renewable energy targets (RET) and/or emissions
reductions targets. This has itself created an unstable and complicated policy environment (COAG Energy Council 2018a, b, c) where increasingly decisions are being
deferred by governments at all levels to the COAG Energy Council. It has also
provided impetus for the Australian Government to investigate the creation of a
National Energy Guarantee (NEG), designed to address the energy ‘trilemma’ of
secure, affordable and low-carbon energy. The solution to the energy trilemma is
however difficult due to the size of the current electricity network and the lack of
coordination around the integration of renewable energy generation assets into the
existing grid. There is also the conflict of interest that arises as the State Governments remain the majority shareholder of the previously vertically integrated distribution and transmission networks in regional Australia. Incentives to change the
operation of the grid are distorted as the State Governments derive a significant
amount of revenue from the ownership of these assets (ACCC 2018).
7.6 Energy and Water Use in Agriculture
Agricultural producers in QLD and NSW are challenged by a complex web of State
and Federal water and energy regulation that is often driven by competing policy
objectives. As a result, agricultural producers find themselves squeezed between
tightly controlled water management regimes and an outdated and overregulated
national energy market system that is plagued by conflict of interest and driven by
capital investments that continuously drives further price increases. Challenges arise
due to the rigidity of Australia’s water and energy regulation that is unable to address
the heterogeneity of Australia’s agricultural producers. Across NSW and QLD, there
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S. Schulte et al.
solar (Finkel Review 2017), have come online in recent years – totalling 4644 MW
across QLD and NSW (QLD Government 2018; NSW DPE 2018b) – as a result of
decreased capital costs. This nonsynchronous variable generation has not only added
an increasing number of decentralised energy generation to the NEM, but the
vertically integrated grid is not well equipped to handle the rapid change. In addition,
new products, processes and business models have come to the market – from the
generation of electricity through to its end use (Finkel Review 2017) – that consumers are looking to satisfy their energy needs.
Finally, there is a distinct political dimension of the COAG Energy Council and
member jurisdictions setting their own priorities concerning sources of electricity
and greenhouse emissions or low carbon. For example, in response to climate
change, the Australian Government has committed to reduce its greenhouse gas
emissions by 26–28% below 2005 levels by 2030 under the 2015 Paris Agreement
(Australian Government 2015). NSW has a net emission target of zero by 2050 and
prior to this had developed a ‘Renewable Energy Action Plan’ which referenced a
previous Federal target of 20% renewables by 2020. QLD on the other hand has a
50% renewable target by 2030. Some years prior to this commitment, States and
territories had set for themselves renewable energy targets (RET) and/or emissions
reductions targets. This has itself created an unstable and complicated policy environment (COAG Energy Council 2018a, b, c) where increasingly decisions are being
deferred by governments at all levels to the COAG Energy Council. It has also
provided impetus for the Australian Government to investigate the creation of a
National Energy Guarantee (NEG), designed to address the energy ‘trilemma’ of
secure, affordable and low-carbon energy. The solution to the energy trilemma is
however difficult due to the size of the current electricity network and the lack of
coordination around the integration of renewable energy generation assets into the
existing grid. There is also the conflict of interest that arises as the State Governments remain the majority shareholder of the previously vertically integrated distribution and transmission networks in regional Australia. Incentives to change the
operation of the grid are distorted as the State Governments derive a significant
amount of revenue from the ownership of these assets (ACCC 2018).
7.6 Energy and Water Use in Agriculture
Agricultural producers in QLD and NSW are challenged by a complex web of State
and Federal water and energy regulation that is often driven by competing policy
objectives. As a result, agricultural producers find themselves squeezed between
tightly controlled water management regimes and an outdated and overregulated
national energy market system that is plagued by conflict of interest and driven by
capital investments that continuously drives further price increases. Challenges arise
due to the rigidity of Australia’s water and energy regulation that is unable to address
the heterogeneity of Australia’s agricultural producers. Across NSW and QLD, there
96
S. Schulte et al.