The Clean Energy Investor Group - representing developers holding $9 billion across 49 power projects nationally including Macquarie,Neoen and BlackRock - said a capacity mechanism could stunt the next wave of wind and solar projects urgently needed to replace retiring coal-fired generators if it was not properly designed.
“A capacity market designed well could significantly assist the development of new clean technology and projects,particularly energy storage,” said the group’s chief executive Simon Corbell,a former deputy chief minister of the ACT.
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“Designed badly it[the capacity market] could really confuse investors,particularly if there is any attempt to provide payments to thermal[coal or gas] generation where it really is not necessary,” he said.
Thecapacity market reform,proposed by the Energy Security Board (ESB) and presented to energy ministers on Monday,would direct payments from retailers to power companies that can be on standby to supply electricity and fill unexpected gaps in the grid when the wind isn’t blowing and the sun isn’t shining.
The board is calling for a “technology neutral” policy that could be applied to grid-scale batteries,pumped hydro,gas and coal as well as renewables.
Federal Energy Minister Chris Bowen and the board say the scheme will target renewable investment but the states should be left to decide if fossil fuels are included.