RE-Alliance and Community Power Agency welcome the opportunity to comment on the proposed reforms establishing the Electricity Services Entry Mechanism (ESEM).
We support a mechanism that provides revenue certainty beyond the standard term of market contracts, enabling bankability and encouraging investment beyond the Capacity Investment Scheme.
However, important lessons have been learned from the deployment of market-based incentives such as the LTESA and Capacity Investment Scheme to date, showing that ESEM’s success will also depend on its ability to incentivise proponents to build trust in the communities where they operate, alongside respect for First Nations rights and lasting regional benefits. The current ESEM framework does not show sufficient recognition of community engagement and local benefits in shaping social licence and project delivery.
As a government-led and consumer-funded investment mechanism, the Electricity Services Entry Mechanism must retain and strengthen the proven social merit architecture established under the CIS. Without embedding these standards into the ESEM, the energy sector will lose its only nationally consistent instrument for driving competition, continuous improvement, and accountability in community engagement and benefit sharing at the project level. Integrating robust, enforceable social performance practices into ESEM reverse auctions is essential to reduce compliance duplication, maintain investor and community certainty, and deliver the energy transition cost-efficiently and at pace.
To ensure the ESEM delivers concrete social value alongside timely, cost-effective project delivery, we recommend the following amendments to the proposed framework:
- Embed robust, nationally consistent social merit criteria into the ESEM
- Allow jurisdictions to strengthen national social criteria
- Make commitments contractually enforceable throughout project delivery
- Develop guidelines collaboratively with affected communities
- Protect the climate and consumers from unverified fossil fuel procurement
Read more in our full submission.
