On the road to nowhere, a line from Oliver Yates of UPC Renewables

On the road to nowhere

The Minister for Energy (and the Environment) is setting the scene for more coal and favoring incumbent energy retailers over the renewables sector. In a detailed paper circulated to media mid-week, the Minister had a lot to say in the build up to his conclusions: that the National Energy Guarantee (NEG) is great for the country and everyone – COAG Ministers in particular – need to hop on board and support it. The message from the coalition is: coal is great for humanity and here for the long haul. Early this week ABC’s Barrie Cassidy reminded Frydenberg that he was also minister for the Environment. The response was silence.

Specifically, and in a bid to dispel what he calls “myths”, the minister has stated: “Fossil fuels have been the bedrock of Australia’s energy system, a ticket to our prosperity.

“Those who would close coal with haste – as Labor and the Greens are on the record for – would see power bills up and our lights go out. For this reason, you won’t hear the Coalition demonise coal.”

Among other unsound and somewhat misleading statements: “The Government repealed Labor’s damaging carbon tax as its first order of business and put Australia on track to easily over achieve its 2020 target … but with just 1.3 per cent of the world’s emissions, we must recognise Australia can’t solve climate change alone. Calls to decarbonise the economy overnight are as irresponsible as they are futile.

Making the case for the National Energy Guarantee “as the most practical means of delivering a more affordable and reliable energy system while meeting our international commitments”, he wrote the Guarantee has the fundamental virtue of using the effectiveness of the market and freeing up the policy debate [as it] addresses the policy and market failure and cuts through the polarisation to integrate energy and climate policy.

“The question is this: how do we establish a policy framework that manages the transition; achieves the objectives of lower prices, higher reliability and lower emissions; and provides constancy and consistency through political cycles?”

He declared the National Energy Guarantee is the first and best opportunity for Australia to do this, stating “A vote against the Guarantee is a vote for higher prices, higher emissions and less reliability.”

Elsewhere in this news bulletin you won’t hear much by way of support for the NEG, rather the complete opposite. As Oliver Yates says, the NEG proposes nothing on climate change and is worse than doing nothing, but [for many reasons] the government is trapped and unable to pass sensible policies, even suggesting coal plants run until 2070.

More from the minister: “At next week’s COAG Energy Council meeting, the ESB will present a high level model, developed in close consultation with stakeholders and will be seeking the Council’s agreement to move to the next phase of detailed design.”

The goal is for ministers to agree to the final Guarantee design in August, with legislation passed before the end of the year – federal legislation to set the emissions target, state legislation to enact the mechanism, he explained. 

“To make the National Energy Guarantee a reality, all NEM jurisdictions – Coalition and Labor – need to agree.

“And so governments at all levels and parties of all persuasions must put ideology aside and work together to put the national interest first.

“The National Energy Guarantee is our chance to secure a lasting consensus.

“We must not miss this opportunity to deliver a more affordable, more reliable and lower emission energy system for Australia.

Readers may have already digested Reneweconomy’s extensive coverage of the matter. And all that matters.

The Climate Council recently circulated a briefing paper that concludes the coalition’s NEG proposed policy falls short when it comes to delivering reliable and affordable power, along with tackling climate change. And discredits the energy minister’s belief “the NEG is the most practical means of delivering a more affordable and reliable energy system while meeting our international commitments.”

In the paper: What are stakeholders saying about the National Energy Guarantee? authors: Petra Stock and Louis Brailsford say the NEG risks derailing Australia’s booming renewable energy and storage sector and will not do enough to reduce Australia’s rising greenhouse gas pollution levels and tackle climate change.

They observe the NEG has misdiagnosed a reliability problem for the national energy grid; Australia’s power supply is highly reliable, and that Australia’s transition to a future powered by clean, affordable and reliable renewable energy and storage is underway, driven by the Renewable Energy Target and state and territory policies.

“In recent submissions a broad range of stakeholders from the energy, business, environment and community sectors expressed serious concerns about the NEG’s inadequate approach to tackling greenhouse gas pollution from the electricity sector, the lack of a demonstrated need for the reliability measure, and the potential for significant cost impacts and reduced competition in the national electricity market,” they write.

Among the key findings is a series of cost and competition concerns:

  • Sixty-one (61) stakeholders raised concerns about the unwarranted cost and complexity of the NEG’s approach.
  • Sixty-four (64) stakeholders raised concerns about the impact of the NEG on competition in the national electricity market.

Emissions reduction target concerns:

  • Fifty-three (53) stakeholders raised concerns about the need for stronger action on climate change.
  • Forty-four (44) stakeholders highlighted the inadequacy of the proposed target for reducing electricity sector emissions in 2030.
  • Thirty-three (33) stakeholders highlighted the need for longer-term pollution reduction targets beyond 2030.
  • Twenty-eight (28) stakeholders argued state and territory targets should be additional to the NEG, or that the NEG emissions reduction target should be at least equivalent to the aggregate of state and territory policies.
  • Forty-nine (49) argued offsets should not be used as part of the NEG, or be strictly limited.

Concerns over reliability mechanism surfaced:

  • Thirty-three (33) stakeholders raised concerns about the lack of a demonstrated need or clear problem definition for the reliability mechanism.

Consultation process concerns:

  • Thirteen (13) stakeholders highlighted the lack of adequate consultation on the NEG.

We wait to see what unfolds at next week’s COAG meeting where it appears some States – in particular Victoria – may refuse to sign off the NEG in its current form  

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