Analysis of Australian Electricity Costs, Reliability, and Policy

This report addresses the pressing issue of rising electricity costs and declining reliability in Australia, examining the transition to renewable energy and its impact on the national grid. It highlights the instability caused by intermittent renewable generation and the need for a more reliable energy source, such as natural gas and large-scale batteries. The report critiques current government policies, emphasizing the importance of stable energy and climate change policies to reduce investment risks and lower electricity prices. The author suggests shifting to a publicly owned national grid and stresses the importance of honest communication with the electorate. The report also discusses the environmental impact of electricity generation and advocates for a balanced approach to energy sources to ensure both environmental sustainability and economic stability. The report concludes with a call for policy changes that prioritize grid stability, affordability, and long-term energy security.

Running head: ACCOUNTING THEORY AND CONTEMPORARY ISSUES
Accounting Theory and Contemporary Issues
Name of the Student
Name of the University
Author Note

1ACCOUNTING THEORY AND CONTEMPORARY ISSUES
DATE:
TO: The Australian Federal Government
FROM: Mr. Dewey- The Senior Partner of the CPA Firm DC&H
SUBJECT: Concern for Australian Electricity Costs and Reliability
The purpose of preparing this memorandum is to insight the issues related to the
increased electricity costs of Australia that is ultimately stating as the least reliable grid for
Australian households. This is because of the decision taken by the government to go abrupt
into recurrent renewable energy without the baseload to support that conversion. The
government can attain a high degree of security and reliability in the next twenty years but
the present situation is not supporting the decision of the government. The Australian Energy
Market Commission (AEMC) also revealed that the national electricity grid is becoming
more unstable due to the changes in the power generation mix and leave the grid at the
weather’s mercy (Simshauser 2018). The issues related to system security have also ascended
because of less synchronous generation in the system and the mode of operating generating
units.
Consequently, a reduction in primary frequency control and distribution has been seen
that implies the grid. Price electricity is too high for the Australian people. The grid is
becoming unstable and unreliable which can fail load or generation.
Otto von Bismarck states that “Politics is the art of the possible, the attainable- the art
of the next best,” but it is not always remarkable. The government is trying to look for a
solution where there is a market failure. The appropriate role of prices can be seen to consider
the failure from generation to retail. The government must initiate to keep prices as low as
possible and redesign the supply system from ground level to main tan accuracy (Lenzen et

2ACCOUNTING THEORY AND CONTEMPORARY ISSUES
al. 2016). This can be done through shifting to a publicly owned national grid from existing
private and state networks.
The electricity generation release 42.5% of CO2 globally. The emission of CO2 causes
harm to the environment as the greenhouse effect. The government needs to have a more
reliable source of energy like natural gas and large-scale batteries. Australia also has large
deposits of natural gas and coal that can be utilized for the betterment and as a reliable source
of energy (Simshauser and Tiernan 2019). The Australian government needs to be honest
with the electorate and with the increasing prices. Also, it should provide a policy of stable
energy and climate change to the technology transitions, which can reduce the risk of
investment, financing costs and the price of electricity.

3ACCOUNTING THEORY AND CONTEMPORARY ISSUES
References
Lenzen, M., McBain, B., Trainer, T., Jütte, S., Rey-Lescure, O. and Huang, J., 2016.
Simulating low-carbon electricity supply for Australia. Applied Energy, 179, pp.553-564.
Simshauser, P. and Tiernan, A., 2019. Climate change policy discontinuity and its effects on
Australia's national electricity market. Australian Journal of Public Administration, 78(1),
pp.17-36.
Simshauser, P., 2018. On intermittent renewable generation & the stability of Australia's
National Electricity Market. Energy Economics, 72, pp.1-19.