The Clean Energy Council (CEC) welcomes the opportunity to engage with the Department for Energy and Mining in the development of the Firm Energy Reliability Mechanism. We support the introduction of a interim mechanism that seeks to incentivise long duration energy storage.
In our submission, we ask that the mechanism should be clear to industry and the contractual obligations should minimise impacts on operation, contract market, bankability, and investment signals. In the current form, we would encourage broad engagement with storage asset developers and AEMO to clearly identify the impacts of any proposed design choice. This is because clarity and simplicity are more likely to deliver value for consumers.
In our submission we draw attention to the implications of instating an LOR 2 and 3 requirement as it relates to investment signals, operating regime, outcome clarity and the effect of LOR on different technology types. In order to adequately value long duration energy storage, we suggest changes to contract length, cap and collar model and merit criteria. Lastly, the framework is seeking to provide secure, reliable, and resilient electricity at least-cost for consumers. We would encourage the Department to understand several factors in depth before considering how to progress with the scheme.
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