Transitional Measures Introduction to Regulatory Measures 1 Why - - PowerPoint PPT Presentation

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Transitional Measures

Introduction to Regulatory Measures

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Why Regulatory Measures ?

• Regulatory control could be seen as

backstop or augmentation to other measures during transition to economy wide price

• If used, the objective would be to

guarantee that a lower carbon target (than would otherwise occur) is achieved prior to an economy wide price

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Types of Regulatory Measure

Several approaches e.g.:

• Restrict construction of new thermal

generation without CCS or equivalent

• Restrict generation by fuel type
• Restrict generation or emissions for new

and or existing thermals

• Mandatory emissions offsets for new

generation

• Combinations of the above

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Regulatory measures create difficult design issues

Such as:

• Integration with the electricity market
• Integration with reserve energy policy

Some observations:

• Need to avoid perverse outcomes and

incentives

• Least cost objective may be difficult to maintain
• Security of supply objective will require

exemption regime

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Exceptions Needed

Regulatory methods require exemptions:

• Exemptions for small isolated

communities

• Exemptions for emergency purposes
• Exemption for major disasters
• Exemption for security of supply reasons

– Exemptions raise compliance costs

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Implementation with legislation

• Electricity Act or new Act could be

used to enable regulation – under investigation

• Administration body needed,

especially for exemptions, could be MED, MfE or EC.

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Using the RMA

Purposes – incentivise new renewable and disincentivise new thermal and address existing and future ‘barriers’ – National Policy Statement/s on transmission and generation, provide planning and policy level guidance to consent authorities – National Environmental Standards, technical and methodological issues such as landscape and noise assessment – Call in and/or consolidated consenting

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Questions

• What impact would you expect regulatory

measures to have on energy prices?

• What impact would you expect regulatory

measures to have on security of supply?

• In addition to the measures discussed, are there

examples of regulatory barriers that need to be identified?

• What activity should an NES target?