Energy Minister Josh Frydenberg faces off with SA Treasurer Tom Koutsantonis over energy policy

ENERGY Minister Josh Frydenberg has staved off a challenge from South Australia and the ACT over the future of the Turnbull Government’s energy policy.

ENERGY Minister Josh Frydenberg has staved off a challenge from South Australia and the ACT over the future of the Turnbull Government’s energy policy.

In what Mr Frydenberg described as a “big win” for the Turnbull Government, a meeting of the nation’s energy ministers on Friday agreed to further work being done on the National Energy Guarantee (NEG).

The SA and ACT governments opposed the move but it was backed by Victoria’s Labor Government as well as NSW and Tasmania which will allow the work to take place.

But for the policy to be actually implemented across the national grid all states must sign up.

That decision won’t be made until April — after the SA State Election.

SA Energy Minister Tom Koutsantonis also proposed for further work to be done on chief scientist Alan Finkel’s preferred policy — the Clean Energy Target (CET) — but that was knocked back by other states.

All states, however, were clearly angered that Energy Security Board had designed the NEG without their approval and forced Mr Frydenberg to agree that would not be allowed to happen again.

Mr Koutsantonis said SA and the ACT would do their own modelling on a CET and emissions intensity scheme.

“They (the Coalition) are confident that their it NEG is the best option for reform. We asked for the proof ... they refused,” Mr Koutsantonis said.

“Whenever you refuse to do open testing and comparisons so we can chose the best model going forward gives me great concern.”

ACT Energy Minister Shane Rattenbury said the modelling could be readily done and provide confidence going forward.

High-level advice to the meeting, obtained by The ­Advertiser, calls on small states to consider blocking energy ­giants from buying new generators or entering the retail market, in a plan to prevent huge monopolies from controlling power supplies.

Mr Koutsantonis said the section in the advice titled “competition in South Australia” demonstrated how a NEG would further entrench the monopoly behaviour of large market participants.

“It proves it (the NEG) would make it more difficult for new competition from renewables to enter the market and takes Australia in the wrong direction,” he said, foreshadowing he was not on board with the policy.

“The reason high power ­prices are being experienced across the country is lack of investment, and lack of competition in the market.”

The 58-page document, written by the Energy Security Board, which designed the NEG, calls for states such as SA and Queensland to consider new regulation controlling energy ownership.

Decisions on energy policies may be pushed back.

“For those jurisdictions concerned about market concentration and market power, there are mechanisms that could be imposed to limit ­further increases in market concentration in those jur­isdictions,” the ESB advice says. Three ideas are floated, which the advice says should be implemented on a state-by-state basis. These include restrictions on which parties can own new generation or be a ­retailer or which companies can be both a retailer and own generation.

“South Australia’s generation sector has a high degree of concentration, with the ­largest generation business (AGL Energy) having a higher market share (42 per cent) than the largest generator in the other NEM regions (ex-Tasmania),” it says.

Federal Energy Minister Josh Frydenberg.

The advice says that the NEG could “exacerbate” market concentration where a high degree of concentration already exists. Tensions between the state and federal governments were clearly boiling over when Mr Frydenberg made an accidental omission on ABC radio ­yesterday.

Apparently not realising he was on air, Mr Frydenberg said: “I’m not getting into a debate with Tom Koutsantonis ... you can either interview me by myself or not at all.”