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| Finkel Review | |
|---|---|
| Name | Finkel Review |
| Author | Independent Review by Chief Scientist |
| Date | 2017 |
| Country | Australia |
| Subject | Energy policy, electricity security |
Finkel Review is a 2017 independent review of Australia's electricity system commissioned by the Australian Commonwealth of Australia and authored by the Chief Scientist. The report assessed reliability, security, and affordability of the National Electricity Market and recommended technical, regulatory, and market reforms. It influenced policy debates involving the Australian Energy Market Operator, the Australian Energy Market Commission, and federal and state governments including the Turnbull Ministry and the Morrison Government.
The review was commissioned amid supply challenges and disputes involving the National Electricity Market (Australia), the Energy Security Board, high-profile closures of large generators such as the Hazelwood Power Station and disputes involving AGL Energy and the Loy Yang Power Station. Rising wholesale prices, projections from the Australian Energy Market Operator and warnings from the Australian Competition and Consumer Commission framed an urgent need for independent analysis. The Chief Scientist sought to advise the Commonwealth Scientific and Industrial Research Organisation, federal departments, and state entities such as the New South Wales Government, Victoria, Queensland and South Australia on options to secure frequency control and system strength alongside emissions considerations implicated by the Paris Agreement.
The report advocated a suite of reforms including a Clean Energy Target concept reconciled with the Emissions Reduction Fund and market mechanisms championed by bodies like the Climate Change Authority. It recommended a national strategic reserve analogous to measures considered by the European Network of Transmission System Operators for Electricity and operational reforms for the Australian Energy Market Operator to procure inertia and fast frequency response. Technical outputs included recommendations for mandatory primary frequency response, firming services via pumped hydro proposals such as Snowy Hydro expansions, and support for grid-scale batteries similar to projects by Tesla, Inc. at Hornsdale Power Reserve. It proposed strengthened roles for the Australian Energy Market Commission and the Energy Security Board while suggesting coordination with state initiatives such as the South Australian Government storage policies and the New South Wales Electricity Infrastructure Roadmap.
Several recommendations informed federal policy through instruments involving the Council of Australian Governments and regulatory amendments administered by the Australian Energy Regulator. The report accelerated investment in battery storage projects including commercial arrangements with Tesla, Inc. and developers like Neoen, and influenced deliberations about pumping schemes such as the Snowy 2.0 expansion. Market rule changes on frequency control and inertia led to operational shifts at system operators like the Australian Energy Market Operator and transmission providers such as AEMO participants, and informed procurement by network businesses including TransGrid and AusNet Services. Its proposals intersected with national debates involving the Coalition and opposition parties such as the Australian Labor Party over emissions targets and infrastructure funding.
Stakeholders reacted variably: industry groups like the Clean Energy Council and companies including AGL Energy and Origin Energy engaged with the report’s market proposals, while unions such as the Australian Workers' Union and community organisations in regions like the Latrobe Valley raised concerns about employment and transition plans. State leaders including the Premier of South Australia and the Premier of Victoria endorsed elements related to storage, whereas some federal MPs from the Liberal Party of Australia criticised aspects tied to market intervention. International observers from institutions including the International Energy Agency and researchers from universities such as the Australian National University and the University of Melbourne cited the review in comparative analyses of grid transitions.
The review combined power-system engineering analysis with economic modelling drawing on inputs from the Australian Energy Market Operator scenarios, projections by the Australian Bureau of Statistics, and modelling techniques common to studies by the International Renewable Energy Agency. It examined system inertia, rate of change of frequency, and fast frequency response available from inverter-based resources including utility-scale photovoltaics by firms like First Solar and wind farms operated by Goldwind. Cost assessments weighed capital expenditure of dispatchable technologies such as combined-cycle gas from suppliers like Siemens and storage capital costs against social costs of emissions under frameworks referenced by the Climate Change Authority. Ancillary services markets and procurement strategies were evaluated relative to precedents in the National Electricity Market (Australia) and international systems such as the California Independent System Operator.
The review’s recommendations have been credited with catalysing investment in storage and reforming ancillary services, shaping policy instruments used by the Australian Energy Market Commission and investment decisions by firms including Snowy Hydro Limited and AGL Energy. Projects like the Hornsdale Power Reserve expansion, proposals for Snowy 2.0, and increased deployment of distributed resources by companies such as SMA Solar Technology reflect its influence. Academics at institutions like the University of New South Wales and policy units in the Grattan Institute continue to reference the review in debates over decarbonisation pathways, grid resilience, and market design. The review remains a landmark input into Australian electricity reform discussions involving state and federal actors including the Council of Australian Governments and regulators such as the Australian Energy Regulator.
Category:Energy policy in Australia