As the COAG Energy Council prepares to meet tomorrow in Sydney, opinion on the Federal Government’s proposed National Energy Guarantee (NEG) in the energy industry is a mixed bag.
A joint statement from a group of 20 energy stakeholders, including AusNet Services, Adani and the Australian Energy Council, urged the COAG Energy Council to approve the NEG, while the Victorian Government has set strict conditions to be met before it signs off on the policy.
Read more industry comment below.
Australian Energy Council
The Australian Energy Council has warned against the NEG being derailed by the separate debate on emissions reduction targets.
“The NEG has broad support as an effective mechanism to get Australia’s energy industry back on track,” Australian Energy Councl chief executive Sarah McNamara said.
“It will deliver confidence back to the sector, and end the uncertainty of the past decade.
“This policy vacuum has prevented us from getting on with the job of building the energy system we need in the 21st century.”
Clean Energy Council
Clean Energy Council chief executive Kane Thornton said while the NEG policy design had potential, the low level of ambition on the emissions reduction target meant the policy would be essentially useless unless this is addressed.
“The $10 billion of new investment being driven by the Renewable Energy Target means the current emissions target will already be almost completely met by the time the NEG starts operating,” he said.
“We need to pump up the target or there won’t be enough certainty to encourage new large-scale renewable energy projects.”
Climate Council acting CEO Dr Martin Rice described the NEG as a ‘trojan horse’, saying the mechanism will fail to slash rising electricity prices for Australian households and businesses or tackle intensifying climate change.
“The NEG will guarantee nothing but Australia’s failure to cut rising greenhouse gas pollution levels and prevent worsening extreme weather events such as heatwaves, supercharged storms, floods, bushfires and drought,” he said.
Energy Consumers Australia
Energy Consumers Australia CEO Rosemary Sinclair said the key value of the NEG is that it brings energy and emissions policy together for the first time, relying on markets to deliver the lowest price outcomes.
“There are varying views on the size and speed of the savings for consumers of getting this sorted out, but one thing is clear – Australians wants bills to get back to normal quickly and deciding to implement the NEG is part of making this happen,” Ms Sinclair said.
ERM Power CEO Jon Stretch said impressive progress has been made in designing the NEG in a highly consultative process.
“The design paper acknowledges how critical it is to foster competition and deliver reliability and affordability outcomes for energy consumers. This is reinforced by the ACCC Report on electricity retailing,” he said.
“At least 70 per cent of generation in any state is controlled by a couple of large entities. The NEG and energy policy must not further entrench the power of vertically integrated gentailers and those with market power in generation.”
The Australian Alliance for Energy Productivity
In a letter to federal and state energy ministers, the Australian Alliance for Energy Productivity has demanded that energy productivity be put on the agenda.
“The cheapest and quickest way to reduce energy bills is to help businesses and householders use energy smarter – that means increasing energy efficiency and productivity,” A2EP chair Jonathan Jutsen said.
“High costs are within COAG’s responsibility to address. It has a National Energy Productivity Plan (NEPP) gathering dust on a shelf.
“At their meeting on Friday, energy ministers could deliver meaningful reductions to bills if they fund and implement the NEPP, and commit to expanding the program and setting firm deliverables and timetable.”
Energy Users’ Association of Australia (EUAA)
For those who are considering rejecting the NEG, Energy Users’ Association of Australia (EUAA) has posed a question. What is plan B and why is it better than this proposal?
“Based on what we have seen and heard, there are no alternative plans,” EUAA CEO Andrew Richards said.
“This means rejecting the NEG won’t take us back to zero on energy policy, it will plunge us deep into negative territory.
“We have an opportunity to create greater certainty in our energy markets and put a lid on volatility through this policy. We can not waste this opportunity to deliver a better outcome for all energy consumers, even if it is not perfect.”
The Smart Energy Council
Smart Energy Council chief executive John Grimes said the NEG is a dud.
“It promises the world, and delivers little,” he said.
“It doesn’t deliver any new investment in renewables or any form of electricity generation, it doesn’t cut coal pollution, it doesn’t reduce power bills, it can’t be easily changed…”
Hydro Tasmania CEO Steve Davy said the policy supports the Battery of the Nation initiative.
“Tasmania has a unique opportunity to provide more flexible, renewable energy and the NEG will encourage the development we need to do that,” Mr Davy said.
“The NEG along with Battery of the Nation could see significant projects like more Bass Strait interconnection, pumped hydro developments, and more on-island renewable energy such as wind farms developed.”
Chemistry Australia CEO Samantha Read said delaying the decision on NEG framework would be at the cost of energy users and jobs.
“The ongoing politicking around energy policy that is critical for this nation’s future, is dismaying,” Ms Read said.
“The only certainty at the moment, is uncertainty. Businesses have investment decisions on hold, putting ongoing viability and jobs at risk.
“You can’t separate energy policy from industry policy.”
APPEA chief executive Dr Malcolm Roberts said the NEG is an ambitious plan to balance cutting emissions with delivering affordable and secure energy.
“Now is the time to act in Australia’s national interest. Australian households and businesses can no longer afford the costs of yet another cycle of political sparring and policy uncertainty,” Dr Roberts said.
“Australia has already lost a decade because of protest politics and the pursuit of pure process. It is time to end the impasse.”