Josh Frydenberg hints government set to drop Clean Energy Target
THE Turnbull government has given the strongest indication yet that it will not put in place a Clean Energy Target as the cost of renewable energy falls and it embarks on other major reforms to the electricity market.
NSW
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THE Turnbull government has given the strongest indication yet that it will not put in place a Clean Energy Target as the cost of renewable energy falls and it embarks on other major reforms to the electricity market.
Energy Minister Josh Frydenberg this morning said emissions from the energy market had already “fallen over the last two quarters as the consequence of the closure of coal-fired power stations and flatlining demand”.
“However, this transition to lower emissions cannot come at the expense of the reliability and affordability of our electricity system,” Mr Frydenberg told a forum in Sydney.
“Should reliability and affordability be compromised, public support for tackling climate change will quickly diminish and previous gains lost.”
The CET is one of 50 recommendations handed to the government by Chief Scientist Alan Finkel which are intended to fix energy security, affordability and reliability issues.
It would extended a scheme similar to the current Renewable Energy Target by pricing different types of electricity generation based on their carbon emissions.
The government has already adopted the other 49 recommendations.
But many Coalition MPs are opposed to a CET, with the Nationals passing a motion at their federal conference last month demanding any such scheme not go ahead.
Former resources minister Matt Canavan has also called for the government to phase out billions of dollars in renewable energy subsidies.
However, major corporations including BHP are backing a CET.
But Mr Frydenberg this morning said the cost of renewable energy was falling already without any CET in place.
“It is against this backdrop of a declining cost curve for renewables and storage, greater efficiencies that can be found in thermal generation and the need for sufficient dispatchable power in the system that we are considering the Finkel Review’s 50th recommendation to which we’ll respond before the end of the year,” he said.
“Globally in the past seven years, the cost of wind-powered generation has more than halved.
“Domestically, solar PV costs have dropped more than 50 per cent.
“By 2020, costs of battery technologies are expected to fall 40 to 60 per cent and over 70 per cent to 2030.”
Gas giant AGL has insisted it is “not losing sight” of the energy affordability issue, while warning that if the process of transition to renewables is not handled correctly, it will “hurt consumers”.
The company’s chief executive, Andrew Vesey, told the AFR National Energy Summit that it was not shying away from the fact that energy prices had to be addressed.
“We do have a real issue - and it’s not only about January 1 2023 when Liddell is gone - it’s about energy prices today,” he said.
“And that’s why absolutely, absolutely have been on board with the initiatives that the Prime Minister has put on the table in terms of retail energy cost, specifically dealing with the most vulnerable in our communities who are hardship customers.”
Mr Vesey said the issue was important and that AGL is “not losing sight of it”.
He also said AGL believed the idea of a clean energy target as a “transition mechanism” was important, but noted that it was “indifferent to the intensity” of that target.
However, Mr Vesey also said it was important to correctly handle the move towards renewables.
“We are in this transition and it is about transition,” he said. “There’s absolute agreement on the end point - it’s the transition that has to be managed. And if not managed correctly... (it) will hurt consumers and will hurt participants in the market.”