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Power Off Power On: Rebooting the National Energy Market
An Options Paper by The Shepherd Review commissioned by the Menzies Research Centre
The Shepherd Review
Power Off Power On: Rebooting the National Energy Market is an Options Paper by The Shepherd Review commissioned by the Menzies Research Centre.
Its brief is to identify the obstacles in the path of national progress and to recommend policy solutions that will drive prosperity.
The ﬁrst stage of the Shepherd Review concluded with the publication of Statement of National Challenges in March 2017 which set out the reform priorities.
Australia has beneﬁted from an extended period of strong economic growth and wealth generation. This has contributed to the country’s high levels of prosperity, relative equality and standard of living.
If Australia is to retain control of its destiny, it must capitalise on new wealth generating opportunities and avoid complacency.
Failure to do so will reduce Australia’s performance over the medium to long term and restrict opportunities for its citizens.
The Review Panel is led by MRC Director Tony Shepherd AO and supported by Secretariat Head, Spiro Premetis. It is working with small, medium and large businesses, specialists and the wider community to produce principled, empirically-based findings.
From the desk of Tony Shepherd
In March 2017 the Shepherd Review published its Statement of National Challenges setting out the priorities for national reform.
Since then we have conducted a series of community forums talking to people in every state to discover what they think needs fixing.
The spiralling cost of energy was the most frequently made complaint in every state except Western Australia.
Concerns about the reliability were a close second. One woman in Whyalla, South Australia, told us she used to shop for groceries once a month. Now she shops twice a week because she cannot rely on her electric freezer.
Energy prices was the number one complaint by small business owners. We learned that fast food franchises are particularly affected. If you’re serving burgers on demand, you cannot turn off the grill.
In Port Augusta, we found a pub running on newly installed diesel generators within sight of the decommissioned Northern Power Station.
Consumers and business owners have a right to feel angry. As our report shows, they have been largely kept in the dark about the extent and effect of subsidies to support the introduction of renewable energy.
It was never made clear that the cost of those subsidies would be added to their bill.
They were not warned about the technical challenge that comes from trying to integrate large amounts of non-synchronous energy generation into the grid.
Nor were they told about the high cost of sourcing reliable energy when wind and solar generators are idle.
It is clear from our report that the energy crisis afflicting Australia is a problem entirely of government making. It is arguably the most costly failure of government in our lifetimes.
Fixing this mess will not be easy. It requires a focussed response from Commonwealth, state and territory governments focussed on the national interest.
Most of all, it requires that the market should be left to balance supply and demand and to pass on the benefits of Australia’s abundant sources of energy.
The cost of inefficiency in the energy market flows through to every sector of the economy. It affects our prosperity, health and employment opportunities. An inefficient energy market puts a handbrake on the economy and limits the life chances of future generations. It is in every Australian’s interest, therefore, to ensure that the market operates smoothly.
Reliable and affordable energy are non-negotiable. Without them, Australians and the businesses they run will struggle to get ahead.
Tony Shepherd AO
Chairman, The Shepherd Review