Outline Of Procurement Strategy In Australia | Australian Power Industry

Outline Of Procurement Strategy In Australia | Australian Power Industry

Outline of procurement strategy in Australia that will allow suppliers to transition from traditional approaches to new technologies.

Here is the some outline steps through which we can improve our procurement efficiency by using different approaches in Australia. These approaches will take time implement but it generates results in economic benefits. (Deloitte, 2015)

The Government should make procurement teams which are practical, legal, insurance and procurement experience. The mixture of this team will results in successful procurement. Government should restructure existing teams to encourage the key players to increase work collaboration (Deloitte, 2015).

Procurement Planning:

Government should relocate procurement resources by focusing on the project object like identifying the needs of public infrastructure end user, retesting for manufacturing users to engage its users to get advantage of project scoping (Deloitte, 2015). It should make objectives clear to get better results and reduction in time and cost consuming (Deloitte, 2015). Govt. should remove those clauses of contract that do not stack up (Deloitte, 2015).

The guideline for procurement should be developed on the basis on limited liability (Deloitte, 2015). It is necessary to verify information provided in tender (Deloitte, 2015). Government has option to reduce project cost by using streamline compliance process (Deloitte, 2015). Government should evaluate tender and adopt that procurement framework which encourage the Innovation in the process (Deloitte, 2015).

Requirement Definition:

Now let’s talk about the detail of these procurement strategies one by one .Australia’s fossil fuel power stations are aging, with the largest capacity stations accounting for a disproportionate share of greenhouse gas emissions which is incompatible with our Paris commitments. Yet there is no plan in place outlining a transition away from these power plants. Although there is currently no shortage of supply, there is already evidence that some of Australia’s largest fossil fuelled power stations are beginning to explore market exit options (stewart, 2017).

Tendering or sourcing:

The Australian government has stated that fossil fuels, particularly coal will continue to play a vital role in providing Australia’s electricity supply. However, traditional fossil fuel powered generators are much less flexible in the way they can operate in comparison to other technologies. With no real ability for reduced operation, there are limits to the involvement of older high capacity fossil fuel power stations in a transition plan (stewart, 2017).

Engineers Australia believes that it is time for a transition plan to be developed which looks at the best options for consumers, the economy and the environment. This transition must reduce uncertainty and send the right signals to potential investors. Delaying a shift away from aging fossil fuel plants to low carbon options increases the likely risks and costs of a transition in the electricity sector, as it can take decades to plan, permit, finance and build new power infrastructure (stewart, 2017).

Evaluation & Selection:

Given the long term nature of conventional electricity investments, investment decisions in base load generating capacity are usually made on the basis of long-term fundamentals rather than short term behavior. If there is ambiguity in policies that will influence Australia’s future electricity generation options, it can create uncertainty for investors.

There is widespread uncertainty that current direct action policies are believed to be inadequate to meet Australia’s emission reduction target, and that the current policy would either need more funding, or need to develop into an emissions trading scheme for Australia to reach this target. Further confusion compounded as a number of jurisdictions are already putting forward their own climate change policies, which results in many states and territories working on different targets and approaches (stewart, 2017). Outline Of Procurement Strategy In Australia.

Climate change polices, which target the amount of emissions that a generator can produce, can greatly alter expectations that generators may have about future costs or revenues. Uncertainty surrounding this policy, which has undergone substantial changes in recent years, can influence a generator’s decision to remain in the market in the hope that it could benefit from little or no changes to government policy.

Contract Award:

At the same time new renewable technology generators affected in respect to their ongoing profitability under the current policy scenarios. Government policy intervention, clearly laid out through a national transition plan, has the ability to shape the future of Australian electricity generation. While government tone about the importance of a transition to help tackle climate change has recently become more positive, real action, and a real transition plan, is still missing from the national discourse. Doing nothing is not an option if Australia is going to follow through with the commitment to Paris targets (stewart, 2017). Outline Of Procurement Strategy In Australia.

In the 2015 Australian Energy White Paper, the government states that it does not favor any intervention in promoting the transition away from coal-fired power plants. The paper states that prematurely forcing new technologies in the energy market through policy interventions runs the risk of early adoption coming at a higher cost and lower efficiency than if that product found its way onto the market by a competitive basis.

Contract Management:

Engineers Australia believes that some government intervention wanted to kick start this transition in the light of the Paris. It shows the subsequent emission reduction targets. Australia will need to take advantage of emerging technologies that can provide reliable electricity supply, but also reduce emissions. For investors of new zero and low emission technologies, governments can initiate change by creating sustainable markets. It creates infrastructure for new technology (stewart, 2017).Outline Of Procurement Strategy In Australia

For emerging technologies, policies to create initial markets must run alongside research and development programmers, far ahead of widespread deployment of the technologies, and draw on competitive market forces where possible. Fostering the development and deployment of emerging technologies expands the number of low carbon technologies available at scale on a commercial basis, providing more flexibility and lowering overall cost. Engineers Australia believes that to reduce emissions in the electricity generation sector, all options should be on the table (stewart, 2017).

References:

Deloitte. (2015). economic benefits of better procurement practice. Deloitte Access Economics, 96.

stewart, M. (2017). the future of Australian electricity. Institution of Engineers Australia. Engineers Australia.

 

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