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

Transitional Measures Introduction to Regulatory Measures 1

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 2

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 3

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 4

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 5

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. 6

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 7

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? 8