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Energy Security Board’s modeling method garners scrutiny from critics

September 08, 2021

Renew Economy:

Energy Minister Angus Taylor has been keenly promoting to media outlets that consumers will save $1.3 billion dollars from a proposal that will require those consumers to pay conventional power generators not just for the actual electricity they produce, but also an extra fee for the size of their power plants’ generating capacity, irrespective of how often it is actually needed.

So how does a new fee given by consumers to the owners of existing coal, gas and hydro generators somehow convert into a saving for consumers?

We went digging to find out. And we discovered that the so-called benefits of a capacity payment are based on a model that doesn’t actually model a capacity payment.

The $1.3 billion benefit is cited by the Energy Security Board (ESB) as the saving consumers would make due to implementation of the capacity payment.

It was calculated by energy market modeller, NERA (National Energy Resources Australia).

Yet NERA didn’t actually model a capacity payment at all.

[Tristan Edis and Johanna Bowyer] 

More: The dubious modelling behind Energy Security Board’s capacity market proposal

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