Energy Security Package
Australia's electricity generation technologies will undergo a comprehensive transformation as a result of the carbon price. This will drive a shift from emissions intensive coal-fired generation to gas and renewable generation.
The government will implement measures to maintain secure energy supplies and ensure a smooth energy market transition as we move to a clean energy future.
An Energy Security Fund will be established to provide for two key initiatives:
- The government will negotiate the closure of around 2,000 megawatts of highly polluting generation capacity by 2020. Closing down some of our high polluting coal-fired capacity makes room for investment in low pollution plant, and kick starts the transformation of our energy sector in a responsible way.
- The government will support electricity generators that are strongly affected by a carbon price through the provision of cash payments and free carbon units, in return for them adopting clean energy investment plans showing how they will reduce their pollution.
In addition to the Energy Security Fund, the government is also providing the following measures to safeguard energy security and encourage transformation of the sector:
- Short-term loans to generators to help finance purchases of future vintage carbon units for the first three years of carbon unit auctions.
- Possible loans to coal-fired generators to refinance existing debt, where finance is not available from the market.
- The government will work with the Australian Energy Market Operator to ensure its transmission planning role prepares us for the clean energy transformation and greater integration of renewable energy to the electricity grid.