Today the Australian Energy Regulator (AER) has released final guidance to address the new emissions reduction objective.
The emissions reduction objective has been 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 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 (21 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.
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 Commonwealth is leading development of an interim value of emissions reduction, expected to be published in November 2023. We expect to issue further guidance following the Commonwealth’s announcement.
Today, the AER also published it draft 2024−29 regulatory determinations for the network service providers listed above. The amended electricity objective will apply to these network service providers for our final determinations.
The Australian Energy Market Commission published final guidance to address how it will consider the amended energy objectives in its rule making processes along with its Targets Statement. The documents are available here.