Chief scientist Alan Finkel urges 'managed' path for emissions cuts

The Hazelwood power station in Victoria is to close by the end of March 2017.
The Hazelwood power station in Victoria is to close by the end of March 2017. Eddie Jim

Chief Scientist Alan Finkel has called for decisions on power station closures to be made as part of a long-term policy on emissions reductions that also sends signals to investors about new investments in supply.

Dr Finkel underscored the importance of having a "managed trajectory" for emissions reductions and of having all parties on board with the process.

"Racing to a particular spot and then thinking about what happens afterwards is not an effective long-term policy," he said in Sydney when asked about the impact of the pending closure of the large Hazelwood coal-fired power station in Victoria next month, which has heightened concerns around security of supply.

"So in a sense it's less important to get an early win as it is to have a process that is supported to the states and sends clear signals to investors about exits and the encouragement of entry."

Dr Finkel was speaking before a "town hall" meeting in Sydney, part of three weeks of consultations around Australia for his report on energy security, due to be handed to the government by mid-year. The meetings have coincided with further power shortages suffered in South Australia last week, as well as for a large aluminium smelter in NSW, amid a heatwave that drove households to ramp up use of air conditioners.

Next week he will leave on a 10 day study tour to Europe and the US to speak with electricity players, regulators and technology providers in countries such as Ireland, Germany and Denmark, some of which have a much higher integration of intermittent renewable energy in their power supply, as well as longer-term planning policies.

Australia lags global progress

"No one is doing it perfectly, but other countries are ahead of us in terms of very deeply considered plans to progress themselves through an emissions reductions policy on a trajectory that goes not just to 2030 but to 2040 and 2050, and adopting new technologies and new market approaches," Dr Finkel said.

"We want to learn from them."

The trip, which also involves members of his panel, will also take in the the PJM regional transmission organisation that covers New Jersey and other states, the ERCOT organisation in Texas and organisations in California and New York City.

Commenting on South Australia's power brownouts last week, Dr Finkel said the situation with Engie's Pelican Point gas-fired power plant, which did not bring on line its second unit, despite high demand, made clear the issues went beyond technological challenges and into gas availability.

"Gas is an essential fuel in this country and if prices are high you get price impacts but if supplies are constrained you get lack of electricity generation," he said.

"It's more than just the technological challenges in switching a combined cycle gas turbine generator from off to on, which could, if you're ready for it, be an hour from nothing to full, they had to work up their gas supplies," he said.

But Dr Finkel said he wasn't prepared to make the case that more generating capacity should be kept ready to jump into the market in such situations to prevent blackouts. It was "premature" to make that conclusion, he added.

He said there was "no single villain" for the increasingly frequent supply problems, with several factors contributing.

"It's not the first time we've had aluminium smelters disconnected under a load shedding agreement – that's why load shedding agreements exist - and it's not the first time we've had a heatwave," he said.

"But it does seem to be happening at a more frequent rate and it's for a variety of reasons."