Energy Minister Josh Frydenberg has urged his peers to put “extreme ideologies” aside and come together on energy policy.
Addressing the National Press Club today, the energy minister used his speech to encourage state and federal ministers to support the National Energy Guarantee put forward by the Federal Government.
“The Turnbull Government is putting a comprehensive plan in place, which at its very heart is the National Energy Guarantee,” he said.
“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.
“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.”
Mr Frydenberg said Australia’s energy policy problem was a practical one that “extreme ideologies” could not solve.
“We need to find sensible, workable, affordable market-based solutions that meet the requirements of the Australian people,” he said.
“The alternative is policy paralysis, more expensive short term government interventions and higher prices that will be paid by the public either as a consumer or taxpayer.”
The energy minister said it was time to deliver some “home truths”.
“Let’s be clear what the NEG is and what it isn’t,” Mr Frydenberg said.
“It is a mechanism that uses the existing electricity market, both spot and contract, where energy is already being traded between buyers and sellers.
“It places an obligation on retailers to provide sufficient dispatchability to ensure reliability – this is power on demand regardless of the weather – while also requiring retailers to reduce the emissions intensity of their portfolio over time.
“It is not a new tax, subsidy or emissions trading scheme. It is technology neutral and does not pick winners. It is not pro-coal or anti-coal; not pro-renewables or anti-renewables.
“It simply provides, according to the ESB, ‘A clear investment signal so the cleanest, cheapest and most reliable generation gets built’.”
The energy minister also addressed criticism the guarantee would limit growth in renewable energy.
“Nothing could be further from the truth,” he said.
“The modelling of the ESB shows renewables under the guarantee will nearly double from 17 per cent today to between 32 and 36 per cent by 2030.”