Central to the public debate about the National Energy Guarantee (NEG) has been the numerical forecasts of its effects – in particular how much it will reduce power prices. In a democracy whose households pay some of the world’s highest electricity bills, it is obvious why this measure should shape the narrative on energy policy.
But Plato tells us that good decisions are based on knowledge, not numbers. What’s more, electricity markets are incredibly complex, and therefore not amenable to straightforward predictions.
The Energy Security Board has put numbers at the centre of its NEG proposal, but the basis of these numbers is not clear. With 22 colleagues in 10 other Australian Universities, we are calling for state and territory ministers to ensure that the ESB’s modelling is available for proper scrutiny. I explain here why I support this request.