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Saturday, 20 April 2024
Dear Minister for Climate Change Energy Environment and Water,
Subject: Serious Concerns with Proposed Capacity Investment Scheme Design for WEM
As a concerned Western Australian taxpayer, I have significant reservations about the proposed design for implementing the Capacity Investment Scheme (CIS) in our state's Wholesale Electricity Market (WEM). After thoroughly reviewing the consultation paper, I cannot support moving forward with this plan as it currently stands due to the potential for higher energy costs, lack of transparency, and risks to energy reliability and affordability.
My primary concerns are:
Undisclosed Costs to Taxpayers
It is deeply concerning that this scheme will place the costs of underwriting risky renewable projects entirely onto taxpayers via long-term Capacity Investment Scheme Agreements (CISAs). The design paper admits that crucial integration costs for distributed energy resources like rooftop solar are simply ignored and not accounted for. This raises serious doubts about whether the full system costs have been captured, likely underestimating the burden that will be unfairly shifted to taxpayers.
Lack of Objectivity and Transparency
The alleged bias towards renewables and exclusion of scenarios that could favour retaining some conventional generation deeply undermines confidence in an objective assessment process. The irregular handling of the second Delphi panel - for steady progress - voting process is particularly egregious. As taxpayers, we deserve full transparency on how our money will be committed through this scheme.
Energy Security and Affordability Risks
Despite claiming to support reliability, this scheme risks undermining the Reserve Capacity Mechanism that is designed to ensure sufficient dispatchable capacity is available. Overbuilding intermittent renewables while constraining conventional generators could jeopardise grid reliability during periods of low renewable output. This unreliability poses risks of higher energy prices for consumers.
Before any taxpayer funds are committed through CISAs, I strongly urge a comprehensive independent review to objectively assess all costs, ensure transparency, and verify energy security can be maintained cost-effectively. The current design is unacceptable for risking higher costs and energy disruptions that will unfairly impact all Western Australians. We deserve an electricity transition plan that is prudent, transparent and economically responsible. The impetus for foundations of this policy (i.e. the achievement of the Australian Government’s 82% renewable electricity by 2030 target is underpinned by the Reputex Report "The Economic impact of the ALPs Powering-Australia Plan Summary-Report December 2021") was designed for the NEM and is unsuitable WEM due to its isolated operating nature and lack of long term storage, amongst other reasons.
Thank you for your consideration.
Nicole Davies
