From: BARR Benn [[email protected]] Sent: Saturday, 3 June 2017 2:11 PM To: RICHARDSON Phil CC: MCCRYSTAL Mitchel; BOWERMAN Melissa; BURNETT Andrew Subject: Re: Finalising Monday materials Does Mitch know about adding in the stanwell bidding direction too Hi Mitch. Muchos gracious On 3 Jun 2017, at 2:06 pm, RICHARDSON Phil < [email protected]> wrote: Hi Mitch Thanks Sent from my iPhone Sent from my iPhone Begin forwarded message: From: < [email protected]> Date: 3 June 2017 at 1:37:12 pm AEST To: Tam van Alphen < [email protected]> Cc: Benn Barr < [email protected]>, < [email protected]>, Mitch McCrystal < [email protected]>, Andrew Burnett < [email protected]> Subject: Finalising Monday materials Hi Tam Thanks Phil Sent from my iPhone 18-040 File B 1 of 21 s.73 s.73 Published on DNRME Disclosure Log RTI Act 2009
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From: BARR Benn [[email protected]] Sent: To: CC ...€¦ · From: BARR Benn [[email protected]] Sent: Saturday, 3 June 2017 2:11 PM To: RICHARDSON Phil CC: MCCRYSTAL
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Attached is the updated fact sheet for Sunday, taking out the direction to Stanwell.
Let me know if you need any further changes made.
RegardsMitch
Mitchel McCrystalManager – Energy Consumer and Pricing
Energy Division, Department of Energy and Water Supply3199 4979 | [email protected]
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Over the past two years, residentialelectricity prices in Queensland haveincreased by only 1.2 per cent per annum
This outcome is the result of the Queensland Government taking strong and proactive action to improve electricity affordability, including:
► deregulating South East Queensland electricity prices on 1 July 2016 to enhance market competition
► providing over $1 billion between 2015–16 and 2016–17 to support regional Queensland consumers through the Uniform Tariff Policy
► directing Energex and Ergon Energy not to challenge the Australian Energy Regulator’s decision on network revenues, thereby locking in lower network tariffs between 2015 and 2020
► extending the Electricity Rebate to Health Care Card holders and asylum seekers.
While this action has helped reduce the pressure on electricity bills, recent supply and demand shocks have led to unprecedented increases in wholesale energy prices across the National Electricity Market.
Given these pressures, the Queensland Government will take additional steps to provide immediate price relief over the next three years.
ACTIONS
► Provide immediate and direct electricity price relief for all Queensland electricity consumers by government covering the cost of the Solar Bonus Scheme
► Return Swanbank E gas-fired power station to service to increase supply and reduce volatility in the Queensland wholesale market
► Implement the Queensland gas action plan to ensure long-term gas supply for electricity generation
Since 2015, the Queensland Government has delivered a range of reforms to successfully stabilise electricity prices in Queensland. In response to emerging challenges, the government will implement a package of new initiatives to ensure consumers can continue to access affordable and secure electricity supply.
Department of Energy and Water Supply
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OOur actions in more detailProvide electricity price relief by covering the cost of the Solar Bonus Scheme
The Queensland Competition Authority’s final electricity price determination for 2017–18 indicates retail electricity prices for residential consumers in regional Queensland will increase by 7.1 per cent from 1 July 2017 without intervention.
The Queensland Government is concerned about the impact of this price increase on households and businesses.
To alleviate this increase, the government has:
► directed Energy Queensland to remove the cost of the Solar Bonus Scheme from electricity bills over the next three years
► reissued a new delegation to the Queensland Competition Authority to set 2017–18 prices in line with the reduced rates.
This action will limit the bill increase for a typical regional household customer in 2017–18 to around 3.3 per cent, and place downward pressure on prices in 2018–19 and 2019–20. The benefits will also flow to South East Queensland customers. As a result, the bill for a typical household will have increased by just over 1.9 per cent per annum over the last three years.
The cost of the Solar Bonus Scheme will be transferred to the government at an estimated cost of around $770 million.
Return Swanbank E gas-firedpower station to service
As a result of extreme weather and events in southern states, there has been significant volatility and upward pressure on wholesale electricity prices across the National Electricity Market. Increasing generation supply will help minimise future volatility and reinforce the state’s energy security.
To achieve this objective, the Queensland Government has directed Stanwell to return its 385 megawatt Swanbank E power station to service in late 2017 to support the market over the summer period.
Implement the Queenslandgas action plan
Gas supply issues are having a significant impact on industrial users and the electricity market, with the lack of availability of gas for generation contributing to upward pressure on wholesale electricity prices.
The Queensland gas action plan will deliver key initiatives to increase gas supply, including supporting more geoscientific data and exploration (particularly in frontier basins), and investigating the need for additional infrastructure to address barriers to development and production in new basins.
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From: CUSSEN Catherine [[email protected]]Sent: Saturday, 3 June 2017 2:39 PMTo: Tam van Alphen; BARR Benn; SIMSHAUSER Paul; RICHARDSON PhilCC: Zoe RussellSubject: RE: Swanbank Annoucment
Importance: High
Updated words for media release marked up below, Tam. On to TP and Q&A now. c
From: Tam van Alphen [mailto:[email protected]] Sent: Saturday, 3 June 2017 1:16 PMTo: BARR Benn; CUSSEN Catherine; SIMSHAUSER Paul; RICHARDSON PhilCc: Zoe RussellSubject: Swanbank Annoucment MR without reference to bidding for reference
Hey Mitch - thanks for pitching in today. I'm hoping you are taking a break.
Re Monday fact sheet I realised you'll have to play with the structure as the new words developed today apply equally to and biddingannouncements.
Have a look at how Mel structured the talking points for tomorrow which seem to work.
You can contact me tomorrow if you want to discuss - phone or email is fine.
C
Sent from my iPhone
On 3 Jun 2017, at 4:54 pm, MCCRYSTAL Mitchel <[email protected]> wrote:
Catherine - If you need to make tweaks to those actions, can you do it in the attached word doc (it will make it easier for me to import into the factsheet).
ThanksMitch
Mitchel McCrystalManager - Energy Consumer and Pricing
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Energy Division, Department of Energy and Water Supply3199 4979 | [email protected]
<Stabilising electricity prices for Queensland consumers_for Sunday.pdf> <Stabilising electricity prices for Queensland consumers_forSunday.pdf> <Actions - stanwell, review.docx>
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Direct Stanwell Corporation to undertake strategies to place downward pressure on wholesale prices
As a shareholder of electricity assets, we have the ability to take steps to counter some of the impacts being seen in the broader national electricity market that are resulting in higher wholesale prices and volatility during peak demand periods.
To complement the return of Swanbank E, the Queensland Government has directed Stanwell to alter its bidding strategies.
This initiative will ensure Stanwell’s bidding strategies reflect the underlying costs of its generation plant, and is designed to put immediate downward pressure on current and forward contract prices.
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From: Tam van Alphen [[email protected]]Sent: Sunday, 4 June 2017 5:16 PMTo: RICHARDSON Phil; MCCRYSTAL Mitchel; BOWERMAN MelissaCC: BARR Benn; SIMSHAUSER Paul; Zoe Russell; Susan McGrady; Kirby Anderson; Geoff Breusch; LindsayMarshallSubject: revised run sheet - can you pls implement
Hi team – new order:
1. DG to welcome and intro Prem – v short2. Premier -
Stanwell direction,
3. Treasurer - announce direction to stanwell on bidding +4.
5. Premier, Treasurer + Minister Bailey to exit for press conference6. DG to take Q&A/mop up7. Media to talk to participants as they exit.
Thanks, Tam
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Thanks Phil. As per our discussion yesterday, Tony and Ian are looking at how monitor effects of both directions to Stanwell. Will keep you in the loop. c
From: RICHARDSON Phil Sent: Wednesday, 7 June 2017 10:01 AMTo: BARR Benn; CUSSEN Catherine; CHAPMAN IanSubject: wholesale market Another good graphic on the post-announcement impact on wholesale market from Global Roam Phil RichardsonGeneral Manager – Energy Consumer and PricingDepartment of Energy and Water Supply(07) 3199 4901 | [email protected] with us on Facebook, Twitter, YouTube and LinkedIn!
I’m also just updating the Estimates brief on this and will send it down in the next few minutes for reference.
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Stanwell Directions Project PlanBackground
QTC’s analysis also determined that if Stanwell’s bidding strategy for the period 1 July 2017 to 31 December 2017 more closely reflected its underlying cost of generation, there would be downward pressure on both current and forward electricity wholesale contract prices, while still ensuring that Stanwell remains commercially viable.
A key short term measure of the Powering Queensland Plan to reduce the price volatility in the electricity market during this period is the return to service of Swanbank E from 1 January 2018. In addition, to put immediate downward pressure on current and forward contract prices, it was decided that Stanwell should alter their bidding strategies to ensure bidding reflects the underlying costs of their respective generation plant.
Project Scope
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The required directions to Stanwell will be issued under the Electricity Act 1994. A direction under section 257 of the Electricity Act requires shareholding Ministers to be satisfied that that it is necessary or convenient to help or give effect to the objects of the Electricity Act, one of which is to ‘ensure that the interest of customers are so protected’.
Stanwell Bidding Strategy
The second direction will ensure that Stanwell’s generation bidding strategy more closely reflects the underlying cost of generation. In this respect, the maximum price threshold selected ( MWh) is consistent with more recent bidding practices by Stanwell. Bidding generation dispatch at this level should be commercially viable for Stanwell, as well as placing downward pressure on forward contract prices.
The direction would bind Stanwell to this approach for the period 1 July 2017 to 31 December 2017. The results of this approach will be monitored to consider any need to extend its duration, or repeat the strategy over the same period in 2018, also noting progress to achieve the complementary approach of bringing Swanbank E back on-line from 1 January 2018.
Deliverables1.
2. Shareholding Minister brief and draft direction under section 257 of the Electricity Act to Stanwell to alter their bidding strategies for the period 1 July 2017 to 31 December 2017 to ensure bidding reflects the underlying costs of their respective generation plant.
Stakeholders Queensland Government Shareholding Ministers DEWS Queensland Treasury
Queensland Treasury Corporation Department of Premier & Cabinet Stanwell Corporation Limited
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Reporting
RisksShareholding Ministers not satisfied that directions under section 257 of the Electricity Act are necessary or convenient to help or give effect to the objects of the Electricity Act (i.e. ‘ensure that the interest of customers are so protected’)
Directions do not provide a strong enough signal to the energy market to reduce current and forward wholesale prices Negative impacts on Stanwell’s financial outcomes
Success CriteriaDirections approved by Shareholding Ministers and issued in accordance with key deliverable dates Current and forward electricity market prices reduce in reaction to Government announcement of directions to Stanwell
Stanwell continues to be financially viable
AuthorizationShareholding Ministers – approval of Directions to Stanwell