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Dr James Prest Australian Centre for Environmental Law, and Centre for Climate Law and Policy

The need for a competition law perspective on attainment of renewable energy targets 12th IUCN Academy of Environmental Law Colloquium Breakout session 1 : Energy Market Regulation 2 July 2014. Dr James Prest Australian Centre for Environmental Law, and

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Dr James Prest Australian Centre for Environmental Law, and Centre for Climate Law and Policy

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  1. The need for a competition law perspective on attainment of renewable energy targets 12th IUCN Academy of Environmental Law Colloquium Breakout session 1 : Energy Market Regulation2 July 2014 Dr James Prest Australian Centre for Environmental Law, and Centre for Climate Law and Policy ANU College of Law Australian National University

  2. Innovation as ‘creative destruction’ “The process of industrial mutation – that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one. This process of Creative Destruction is the essential fact about capitalism.” Joseph Schumpeter (1943) Capitalism, Socialism and Democracy, p.83.

  3. “History provides many examples of technological revolutions that have reshaped the world. However, none have run their course without encountering massive resistance. No change has been brought about in consensus with those on the losing end…The challenge is how to overcome the vested interests of energy suppliers.” Herman Scheer, “In praise of creative destruction” 12.12.2009

  4. 3 forms • 1. Competition in the generation market • 2. Competition for the retailers posed by retail grid parity in solar PV markets and by ‘behind the meter’ installations • 3. New forms of indirect competition for the electricity distribution companies – • Storage • Distributed generation • DG with Storage

  5. Chinese c-Si PV panel prices $/W (Bloomberg New Energy Finance, 2012)

  6. 7—National electricity objective The objective of this Law is to promote efficient investment in, and efficient operation and use of, electricity services for the long term interests of consumers of electricity with respect to—             (a)         price, quality, safety, reliability and security of supply of electricity; and             (b)         the reliability, safety and security of the national electricity system.

  7. Act on granting priority to renewable energy sources (Renewable Energy Sources Act, EEG) • Gesetz für den Vorrang Erneuerbarer Energien (Erneuerbare-Energien-Gesetz, EEG) • Section 5 Connection • (1) Grid system operators shall immediately and as a priority connect installations generating electricity from renewable energy sources and from mine gas to that point in their grid system (grid connection point) which is suitable in terms of the voltage and which is at the shortest linear distance from the location of the installation if no other grid system has a technically and economically more favourable grid connection point. • In the case of one or several installations with a total maximum capacity of 30 kilowatts located on a plot of land which already has a connection to the grid system, the grid connection point of this plot shall be deemed to be its most suitable connection point.

  8. Obligation to strengthen network • S.5(4) The obligation to connect the installation to the grid system shall also apply where the purchase of the electricity is only made possible by optimising, boosting or expanding the grid system in accordance with section 9. • Section 9 Grid capacity expansion • (1) Upon the request of those interested in feeding in electricity, grid system operators shall immediately optimise, boost and expand their grid systems in accordance with the best available technology in order to guarantee the purchase, transmission and distribution of the electricity generated from renewable energy sources or from mine gas. • (3) The grid system operator shall not be obliged to optimise, boost or expand his grid system if this is economically unreasonable.

  9. s. 8 EEG law (Germany) • (1) Subject to section 11, grid system operators shall immediately and as a priority purchase, transmit and distribute the entire available quantity of electricity from renewable energy sources and from mine gas.

  10. Legal frameworks for the energy shift must overcome Carbon lock-in to incumbent tech “industrial economies have become locked into fossil fuel-based technological systems - through a path-dependent process driven by technological and institutional increasing returns to scale….carbon lock-in arises through a combination of systematic forces that perpetuate fossil fuel-based infrastructures in spite of their known environmental externalities” “…locking-out alternative carbon-saving technologies through a variety of systemic processes.” “interlocking technological, institutional and social forces that can create policy inertia” Unruh, G., 2000. “Understanding Carbon Lock-in” 28 Energy Policy 817–830. Unruh, G., 2002. “Escaping carbon lock-in” 30 Energy Policy 317–325.

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