Prime Minister Julia Gillard, Minister for Climate Change and Energy Efficiency Greg Combet and Minister for Resources and Energy Martin Ferguson today announced two significant new initiatives to maintain energy security, ensure market reliability and support the transformation of the energy sector.
As part of its plan for a clean energy future, the Gillard Government will establish an Energy Security Fund and a new Energy Security Council.
The Energy Security Fund includes three key initiatives to support Australia's
electricity sector:
? Payment for closure - the Government will seek to negotiate the closure or partial closure of some of Australia's most emissions intensive generators to remove up to 2,000 megawatts of capacity before 2020. This will start the process of replacing existing, highly emissions intensive electricity assets with cleaner energy generation and give new investors time to develop replacement generation capacity. The payment for closure will be on an agreed basis and managed in an orderly way so as to not risk energy security.
? Assistance for strongly-affected generators - there will be transitional assistance provided to the most emissions-intensive coal fired power stations in Australia, which would be most impacted by the carbon price. This assistance will be provided as a mixture of payments and permits.
? Loan support - the Government will offer short-term loans to generators to help finance their purchase of carbon permits and support the re-financing of existing debt if commercial loans are unavailable.
A new Energy Security Council, consisting of energy and financial market experts and energy market bodies, will also be created to advise the Government on support measures to address energy security risks.
Finally, the Government will request the Australian Energy Market Operator (AEMO) to expand its planning scenarios for the future development of the electricity grid to prepare for the clean energy transformation and greater integration of renewable energy.
Further information about the Government's clean energy future and carbon price announcement is available at www.cleanenergyfuture.gov.au