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Further refinement needed on National Energy Guarantee, but progress important

The clean energy industry has called for further negotiation and refinement on critical elements of the National Energy Guarantee (NEG) but welcomed further progress on the policy and the release of the draft legislation.

Clean Energy Council Chief Executive Kane Thornton said the clean energy industry remained concerned with some aspects of the NEG architecture, along with the level of the Federal Government’s proposed emissions reduction target.

“We believe 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. These include more frequent reviews of the emissions target and the inclusion of a mechanism that prevents it being cut in the future,” Mr Thornton said.

“We call on the Federal Government and all states 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.

“The government has agreed to progress the recommendation from the Australian Competition and Consumer Commission (ACCC) to establish a vehicle for government underpinning of offtake agreements to support new low-cost clean energy generation.

"This provision could help to encourage power purchase agreements between businesses and developers of new energy projects. But this intervention in the market will need very careful consideration to ensure it does not end up being twisted to meet a narrow political agenda and damage the investment confidence that is crucial to bringing on new energy generation.

“Clean energy investors will be relieved that the government has not committed to funding new coal-fired power stations. This would have distorted Australia’s energy market, spooking private investors which have just invested a record $10 billion in new clean energy projects across Australia,” he said.

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.