Energy Ministers Josh Frydenberg urges states to back National Energy Guarantee at COAG
MALCOLM Turnbull’s action plan to push down power prices and secure more reliable electricity has passed its latest hurdle, with states and territories agreeing to more detailed design work.
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MALCOLM Turnbull’s action plan to push down power prices and secure more reliable electricity has passed its latest major hurdle, with the states and territories agreeing to continue detailed design work.
It gives ministers who identified concerns with aspects of the National Energy Guarantee a four month reprieve to push for changes before the federal government’s deadline for a decision in August.
Federal Energy Minister Josh Frydenberg told reporters after the meeting he was confident of being able to work through the issues raised by the states to secure support for the NEG.
“This is Australia’s best chance to integrate energy and climate policy and deliver cheaper, cleaner, more reliable power to all Australians,” he said.
“If we don’t seize this opportunity, what we will see is higher prices, lower reliability, and more expensive government interventions, and that is not a positive way forward for our country.”
The federal minister said energy and climate policy had been a political football for far too long.
He appeared confident the NEG would also pass another looming hurdle - the Coalition party room, where backbenchers including former prime minister Tony Abbott have been vocal in their support for coal-fired generation.
The policy will go before the party room before legislation is put before parliament later this year.
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The Energy Security Board will now continue to progress a more detailed design, expected to be released in July.
No state has spoken out against support for a detailed design, but none has offered full support for the plan yet either.
South Australian energy minister Dan Van Holst Pelekaan gave the strongest indication of support.
“If the details we receive shortly will support South Australia, then we will support the National Energy Guarantee,” he said ahead of the talks. If it doesn’t, the state won’t back the deal — but will support further detailed work, he said.
NSW and the Business Council are urging ministers to get on board with the plan.
ACT Climate Change Minister Shane Rattenbury and Victorian Energy Minister Lily D’Ambrosio both identified major sticking points ahead of the meeting and called for more details.
The biggest sticking point was the 26 per cent emissions reduction target for the electricity sector, at the lower end of Australia’s Paris Agreement commitment of 26-28 per cent reduction of 2005 level emissions by 2030.
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Ministers were questioning the low target for electricity where abatement is cheaper and easier to achieve than in agriculture, industry and transport.
Following the meeting, D’Ambrosio said she had received assurances on critical issues but still wanted more detail from the ESB.
“We’re pleased that we’ve received a number of assurances and that is that the states’ own renewable energy and emissions reduction targets will be honoured and this is a very important point for our state,” Ms D’Ambrosio said.
Ahead of the meeting, Mr Frydenberg had urged the states to end the political war on energy or Australian households and businesses would continue to be the “casualties”.
He indicated he would assure his state counterparts at the meeting that the NEG would not stop them implementing their own more ambitious emission reduction targets.
“The state targets absolutely coexist with the NEG,” Mr Frydenberg told Sky News today.
“Nobody is seeking a limit on what the states are doing. To the contrary, we are saying what they are doing contributes to the overall national goal.”
The Minister said it was the federal government’s role to set a national emissions reduction target because it was the government to sign the Paris Agreement.
“It’s a federal responsibility as a treaty we entered into. It’s therefore a federal responsibility to set the emissions reduction target and to put into place the policies to meet them,” he said.
“If the states want to contribute to that they can. Obviously my preference ... is not to have separate state schemes but I recognise I can’t stop that.”
Under the current plan, understood to have been agreed to today, the government will legislate an emissions reduction target of 26 per cent by 2030 for the electricity sector to be reviewed every five years.
States and territories will be able to have their own more ambitious emissions targets, but they won’t change the national target.
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The NEG will be technology neutral, so there won’t be subsidies or incentives for renewables, but also not for coal.
Retailers would be required to buy a share of their electricity from “dispatchable” sources, such as coal, gas, batteries and pumped hydro, that can be controlled to guarantee supply meets demand and prevent blackouts.
It also proposes to allow retailers to use external offsets to meet their emissions guarantees.
The Energy Security Board estimates household power bills could be reduced by around $120 a year between 2020 and 2030 under the model.
The federal Opposition has indicated it will continue to implement the NEG if it wins government but will legislate to set a higher emissions reduction target of 45 per cent.
Shadow energy and climate spokesman Mark Butler said on social media today the government’s proposed target would result in no new renewable energy projects being built for the next decade.
As proposed, the National Energy Guarantee will result in no new renewable energy projects being built over the 2020s. For the Turnbull Govt, this is just their latest in a long list of attacks on renewable energy. Things will change under a Labor Govt. #auspol #climatechange
— Mark Butler MP (@Mark_Butler_MP) April 20, 2018
Mr Frydenberg said the Coalition would “make a very strong case” for not changing the 26 per cent target to give investors the certainty and constancy they needed to make the right investments.
But he acknowledged it could not stop the change if Labor legislated it in government.