Former CBA chief to head financial inquiry; No carbon price makes renewable target a “tall order”: Midday Roundup

The former chief executive of Commonwealth Bank of Australia, David Murray, will head an inquiry into Australia’s financial system aimed at fostering an “efficient, competitive and flexible” system.

Murray will oversee the inquiry alongside a group of finance academics. The final report is expected to be released in November 2014.

Prime Minister Tony Abbott told a business function in Canberra the inquiry should result in lower fees, less costs and “greater efficiency in the allocation of capital”.

The inquiry is expected to be the most comprehensive in two decades.

Renewable target a “tall order” without carbon price

Coal-fired energy is set to dominate electricity production with the scrapping of the carbon pricing mechanism, says carbon market advisors RepuTex.

The federal government is set to test the resolve of the opposition in Parliament this afternoon by introducing bills to repeal the Labor carbon pricing scheme.

Reputex has released a report titled Coal Generation: Moving Out of the Crosshairs today which predicts coal power generation will “grow from 74% of the fuel mix in 2012-13 to 81% of all national energy market generation by 2020 – an increase of 7%, and 6% higher than previous expectations under the carbon pricing mechanism”.

The rise of the cheap fossil fuel will see a predicted cut in gas and wind power generation, RepuTex’s report reveals, and gas energy generation is expected to fall by 50% of current levels by 2020 due to the commodity reaching international price parity in 2014.

Wind power generation is expected to grow from 5% of the energy mix to 7.5% in 2020, falling short of the expected 12% forecast under a carbon price.

“The lack of price support from the carbon price mechanism is likely to make achieving the 20% renewable energy target by 2020 a tall order” said RepuTex head of research Bret Harper.

Shares fall on open

Aussie shares have opened lower again this morning, ahead of Reserve Bank governor Glenn Stevens’ speech about the Australian dollar.

The S&P/ASX200 benchmark was down 18.3 points to 5289.4 at 12:02pm AEDT. Overnight the Dow Jones closed down 66.21 points to 15,900.82.