The Australian Energy Regulator (AER) has released draft guidance to address the new emissions reduction objective.
The emissions reduction objective will be added to the existing economic efficiency framework in all three energy objectives: National Electricity Objective, National Gas Objective and National Electricity Retail Objective.
The AER’s draft guidance addresses:
- the matters the AER is likely to have regard to in considering whether to apply the amended energy objectives to processes which are underway at the time the amendments take effect (likely November 2023).
- how the AER may operationalise the amended electricity objective to Ausgrid, Endeavour Energy, Essential Energy, Evoenergy, TasNetworks Distribution, TasNetworks Transmission and Power and Water Corporation (NT) (network service providers) for the 2024−29 regulatory determinations.
We expect to publish our final guidance by September 2023.
The AER supports clarity around the changes to the national energy objectives to refer to government emission reduction targets and their application to AER decisions. As the independent regulator, the national energy objectives guide our work to promote the long-term interests of consumers with respect to achieving emission reduction targets, alongside our existing considerations including price, quality, safety and reliability of energy supply.
The long-term interests of consumers will extend to the achievement of Commonwealth, State and Territory targets:
- for reducing Australian’s greenhouse gas emissions, or
- that are likely to contribute to reducing Australia’s greenhouse gas emissions.
Today, the Australian Energy Market Commission (AEMC) is also publishing draft guidance to address how it will consider the amended energy objectives in its rule making processes.
Consultation
Stakeholders are invited to make submissions on the AER’s draft guidance by Friday 18 August 2023.