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Jun 20 2022

AEC supports work on capacity mechanism

The peak body for power generators and retailers, the Australian Energy Council says it supports the Energy Security Board’s work on a capacity mechanism.  

The AEC’s Chief Executive, Sarah McNamara said, “We welcome the emphasis on any capacity mechanism being technology neutral so it can deliver the best outcomes.   

“The AEC believes any capacity mechanism needs to support existing plant, as well as new plant. Our preference remains for neutrality between the two, but we will consider the draft proposal.  

“We would be concerned if there are jurisdictional carve outs to the mechanism, which could lead to it being much less effective in supporting the energy transition.  

“The AEC’s position is strongly against lowering the energy market price cap as it is contrary to the ESB and COAG’s previous position on the energy market itself remaining the main investment signal. 

“Whilst capacity mechanisms exist in many places, there have been many challenging issues, arguments and repeated adjustments. Introducing one into a 25-year-old energy-only market will be anything but straightforward. For that reason, we support the ESB's efforts in working through what are difficult issues and will continue to assist their work.  

“We look forward to providing a detailed response to the ESB and contributing to the discussion on the best form of a mechanism,” said Ms McNamara.  

About the Australian Energy Council 

The Australian Energy Council is the peak industry body for electricity and downstream natural gas businesses operating in the competitive wholesale and retail energy markets. AEC members generate and sell energy to 10 million homes and businesses and are major investors in renewable energy generation. The AEC supports reaching net-zero by 2050 as well as a 55 per cent emissions reduction target by 2035 and is committed to delivering the energy transition for the benefit of consumers.

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