The Energy Security Board (ESB) has released its consultation paper on the Federal Government’s National Energy Guarantee (NEG).
The consultation paper seeks stakeholder views on the design of the NEG, which the COAG Energy Council will consider at its April meeting.
“The NEG will ensure Australians have a reliable energy system and as shown by independent modelling households will be $300 a year better off than they would be under federal Labor,” Energy Minister Josh Frydenberg said.
“The NEG will lower electricity prices, make the system more reliable, encourage the right investment and reduce emissions without subsidies, taxes or trading schemes.
“It is truly technology-neutral, offering a future for investment in whatever technology the market needs – solar, wind, coal, gas, batteries or pumped hydro storage.”
Australian Energy Council chief executive Matthew Warren said the release of the discussion paper was an important step towards achieving a workable energy and carbon policy framework for the energy industry.
“The discussion paper provides important options to deliver reliability and emissions reductions as we transform the electricity sector,” he said.
“Importantly the paper retains the existing market designs and contracting arrangements.
“This will enhance the NEG’s ability to deliver new investment to lower emissions without compromising reliability.
“The de minimis approach to existing electricity markets proposed by the ESB follows the backing of the NEM by the International Energy Agency (IEA) overnight.”
Mr Warren said the current market design is “not the problem”.
“The independent review from the IEA has found the NEM remains an effective platform to deliver the transformation, providing there is further reform of policies and markets rules,” he said.
“The ESB has correctly identified that the central benefit of getting the NEG settings right is that they will provide much-needed certainty for market participants so they can make long-term investment decisions.
“The next steps outlined in the discussion paper offer the means to get the all-important design details right.”
The Energy Security Board will undertake further consultation and design work on the Guarantee following the COAG Energy Council meeting in April 2018, with the final detailed design to be presented to the COAG Energy Council later this year.