NEG needs more work

COAG energy ministers agreed today (Fri 24 Nov) to commission more design work on the Turnbull government’s proposed National Energy Guarantee, forcing the renewable energy industries in Australia into a new era of policy uncertainty.

The decision was expected, given that Queensland could not vote due to its state election tomorrow, the Liberal governments in NSW and Tasmania would always support it, and Victoria earlier this week declared itself open to finding out more about the plan.

This left South Australia and the ACT in the minority in their opposition to the NEG – or, as federal energy minister Josh Frydenberg put it in a press conference in Hobart this afternoon, they “they had their say today, and they lost.”

The federal government was forced to abandon its original tactic of asking the states to actually approve of the NEG, instead merely seeking consensus on doing further work.

The Energy Security Board will now do this work, returning with more ideas in April about how a new emissions obligation and a reliability obligation might work; how it can avoid reinforcing the power of the incumbent generators, and if it is scaleable.

Final design proposals may not be presented until the second half the 2018. Agreement then, will require the support of all states.

The decision means at least another year of policy uncertainty, to the detriment of the transition to renewables.