Mr. Jim Gannon:

We have not advised the Minister or Department about the Energy Charter Treaty. We have not been asked for advice on it. Again, we remain in place and are happy to advise should we be so requested, in line with our obligations under the Electricity Regulation Act.

In terms of the auction process for renewable energy generation, the auction asks and seeks entities to compete against one another. They put together their best commercial proposition and try to win the auction. That involves a downward price pressure.

The cost stack of that then becomes relevant. We need to consider what a wind turbine costs, including the cost of the site, the grid connection and, as the Senator said, the operational costs and what support they might give to or interaction they have with local communities.

We seek to provide as much clarity as possible to auction participants. We sat on a steering group in the Department of the Environment, Climate and Communications to look at the auction. That process would interact with the industry and try to identify areas of risk or uncertainty. For example, in the SEM committee, in particular, there was uncertainty about curtailment and constraint when wind turbines are asked to turn down, and how they might be compensated for that in line with the European directive. This was an uncertainty that might have been bid into in the auctions and for which people would have paid a premium. Over the past number of days, the SEM committee, ourselves and, the other regulatory authorities and independent members have published our decision on that, which provides clarity to wind developers so that they now know what the cost and compensation is likely to be. They can now bid in terms of what they know rather than in an unknown that may include conservatism. That is one example of a response to industry.

In terms of grid connection cost, there is a process in place whereby a renewable energy developer can contest the grid connection and decide to build the grid connection themselves. That process allows a developer to deliver it if it believes it can do so more cost effectively and faster, in certain cases. I will pass over to my colleague, Mr. Melvin, on RES and the cost of renewables.