Today’s agreement to continue negotiating the policy framework of the National Energy Guarantee (NEG) is a sensible step forward that recognises the broad support for the policy but also the critical need to address some final design issues, the clean energy industry said.

Clean Energy Council Chief Executive Kane Thornton said the clean energy industry believes the policy framework of the NEG could work if the emissions reduction target is substantially increased and a range of other design issues are addressed.

If the NEG is going to drive the new energy investment that is crucial to lowering power prices, the proposed target of 26 per cent emissions reduction by 2030 needs to be higher,” Mr Thornton said.

“The NEG is a complex reform that requires careful consideration and design. Today’s discussions must be followed by genuine negotiation on the outstanding critical issues.

“Many of the conditions proposed by jurisdictions such as Victoria, Queensland and the ACT are reasonable and are supported by the clean energy industry, including the call for more frequent reviews and the inclusion of a mechanism that prevents the emissions reduction target being cut in the future.

“We call on the Federal Government and all state and territories to keep cool heads and negotiate in good faith to find a compromise that will provide the long-term investment certainty needed to deliver new clean energy generation,” he said.

Mr Thornton said design issues that need to be addressed include:

  • The policy architecture should include a backstop that prevents future attempts to reduce the emissions reduction target
  • The target should be reviewed more frequently than currently planned to ensure it keeps up with changes in the energy sector
  • The design proposes automatically passing the emissions reductions from solar power systems to electricity retailers. This should be fixed so solar system owners can decide where their emission reductions go
  • Energy storage projects should not be subject to the reliability obligation, given the significant role energy storage plays in supporting reliability
  • Western Australia and the Northern Territory are currently excluded from the emissions reduction target, resulting in an emissions reduction of less than the nominal 26 per cent. A comparable scheme or commitment must be adopted across these jurisdictions
  • Offsets should be excluded from the scheme. Out-sourcing emissions reduction to other sectors means less investment in new energy generation, which means higher power prices.

The Clean Energy Council’s full submission on the design of the National Energy Guarantee is available from our website.

Please contact Clean Energy Council Media Manager Mark Bretherton on 0413 556 981 for more information or to arrange an interview.