PM dumps clean energy target in new power plan

After months of debate, the federal government has finally made the decision to ditch the clean energy target.

A clean energy target was recommended as the most effective mechanism to fix the country’s energy crisis in Australia’s Chief Scientist Dr Alan Finkel’s review into the NEM.

All 50 recommendations in Dr Finkel’s report were supported by the government with the exception of the clean energy target, which has been at the centre of months of fiery debate.

Today, Prime Minister Malcolm Turnbull announced a new plan had been approved by the Coalition party.

“The Turnbull Government will accept the recommendation of the Energy Security Board (ESB) for a new National Energy Guarantee (NEG) to deliver more affordable and reliable electricity while meeting our international commitments,” the PM said.

“As our energy system transitions, we must ensure households and businesses have access to affordable and reliable power.

“The independent ESB advises the NEG will give certainty to investors and therefore encourage investment in all forms of power.

“This means electricity bills will be lower than currently forecast and lower than they would have been under a clean energy target.

“The ESB estimates typical household bills will fall by an average of $110-$115 per year over the 2020-2030 period.”

The new power plan is made up of two parts, a reliability guarantee and an emissions guarantee, that will require energy retailers across the NEM to deliver reliable and lower emissions generation each year.

The reliability guarantee will be set by the Australian Energy Market Commission (AEMC) and Australian Energy Market Operator (AEMO) to deliver the right level of dispatchable energy needed in each state.

The emissions guarantee will be set to contribute to Australia’s international commitments.

The level of the guarantee will be determined by the Commonwealth and enforced by the Australian Energy Regulator (AER).

“Past energy plans have subsidised some industries, punished others and slugged consumers,” the PM said.

“The National Energy Guarantee 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 storage.

“Unlike previous approaches, we are not picking winners, we are levelling the playing field.

“Coal, gas, hydro and biomass will be rewarded for their dispatchability while wind, solar and hydro will be recognised as lower emissions technologies but will no longer be subsidised.”

The head of the Energy Security Board Kerry Schott told ABC the plan would help in terms of reducing emissions.

“The obligation to have a reliable power system is now intimately linked with an emissions reduction target,” Dr Schott said.

“And if you don’t have those two things linked together, you have a danger of an increase in intermittent renewables without having a reliable and dispatchable power to go with it.”

“And it’s very important that you always have dispatchable power where you have intermittent resources.”

The government will now work with the ESB and the states through COAG to implement the new plan.

‘Golden opportunity’ lost

Clean Energy Council chief executive Kane Thornton said the government’s decision to walk away from the clean energy target is likely to result in in a “substantial slowdown” in new clean energy investment.

“The clean energy target was the best opportunity in years to lock in the long-term bipartisan energy policy needed to encourage investment in cleaner energy while improving system reliability and pushing down power prices,” Mr Thornton said.

“We are obviously waiting to see more detail on the policy later today, but media reports today suggest the new policy would result in a substantial slowdown in levels of investment in clean energy.”