Four states to go it alone on CET

South Australia, Victoria, Queensland and the ACT have joined forces to immediately implement a clean energy target (CET) without approval from the Federal Government.

Australia’s chief scientist Dr Alan Finkel made 50 recommendations in his Final Report into the Future Security of the National Electricity Market, handed down in June.

At Friday’s COAG Energy Council meeting in Brisbane, all the recommendations were supported with the exception of the CET.

South Australia and other eastern Labor states, including Queensland, Victoria and the ACT, have since begun the process of establishing their own target without federal approval.

The meeting communiqué said the Commonwealth was “carefully considering” the clean energy target.

“As council did not support tasking the AEMC to develop design options for implementation of a clean energy target, the Council noted that Queensland, Victoria, South Australia and the Australian Capital Territory will separately commission the AEMC to do further work in this area.”

Federal Energy Minister Josh Frydenberg pointed out the review had only been received five weeks ago and there was no rush.

“We need to get this right, Dr Finkel made it very clear that the CET, if it was to be implemented, would be from 2020, so there is no rush, what is important is to get the policy right,” Mr Frydenberg told reporters on Friday.

South Australian Energy Minister Tom Koutsantonis said the states would immediately begin tasking the AEMC to work with AEMO to develop and design the options to implement the CET.

There is now broad support for a CET from industry, business, climate groups and state governments – that is a very strong coalition all calling for a market mechanism like the CET to drive down power prices,” Minister Koutsantonis said.

“It is incredibly frustrating that despite the overwhelming community support for a market mechanism, the federal government is still resisting committing to all 50 Finkel recommendations.

“The Finkel Review is a package of 50 actions and should be treated as such.

“The Federal Government’s own chief scientist found a CET would lower prices, improve system security and help Australia meet its carbon reduction commitments.

“But opposition from the coal lobby and the right wing of his party is preventing the Prime Minister from acting in the interests of all Australians.”

Speaking ahead of the COAG meeting, Queensland Energy Minister Bailey said a CET was critical to deliver the signals needed by the market to allow investment in new generation, increasing supply and alleviating price pressures across the country.

“The Finkel Review modelling clearly showed a CET would deliver lower electricity prices, more investment and lower emissions compared to a business as usual approach,” Mr Bailey said.

“That modelling showed households would be around $90 better off per year over the next decade under a CET

“The Federal Energy Minister seems to want to keep the most important recommendation of the Finkel review in the too hard basket because of the internal divisions within his party which can’t reach agreement on energy and climate policy.”

Minister Bailey said national policy uncertainty has been crippling the National Electricity Market, preventing much-needed investment in new generation, driving up wholesale prices and putting energy security at risk.

“Industry and consumer groups are united on the need to break this deadlock and the CET provides a clear pathway to achieve this,” he said.

“This is not surprising, as Dr Finkel and other industry experts agree renewable energy is now the cheapest form of new generation.”

The Victorian Government has also developed its own proposed gas market reforms, claiming the Australian Domestic Gas Security Mechanism doesn’t go far enough, quick enough.

The state’s proposal includes a new gas export mechanism that would place a cap on the total allowable gas that major companies can export in order to protect domestic needs.

The Labor Government is also exploring the development of a LNG import terminal in Victoria.

“If Malcolm Turnbull was genuinely concerned about rising power prices he would immediately endorse a clean energy target and cap the unsustainable level of gas exports that are driving up prices – this would give businesses, industry and consumers the certainty they need,” Minister for Energy, Environment and Climate Change Lily D’Ambrosio said.

“Malcolm Turnbull’s own advice shows that his gas plan won’t have any impact on prices.

“Our plan would have an immediate impact and should be implemented without further unnecessary delays.

“Victoria and other states are willing to go it alone on a Clean Energy Target. The paralysis in the Liberal party, fuelled by childish bickering between Malcolm Turnbull and Tony Abbott, is leading to higher energy prices for Victorians.”