Will the National Energy Guarantee deliver?

Will the National Energy Guarantee (NEG) save our energy future?

The answer will depend on setting a realistic expectation of what the energy sector can technically and economically deliver, according to Dr Alex Wonhas – global managing director, energy, resources and manufacturing at Aurecon and former executive director leading CSIRO’s environment, energy and resources sector.

Prime Minister Malcolm Turnbull and Minister for the Environment and Energy Josh Frydenberg’s National Energy Guarantee (NEG) might suggest we can “have it all” – more reliability, lower costs and lower emissions.

However, according to Dr Wonhas, there is a risk reality will fall short of expectations and energy outcomes will be inefficient, if we don’t get critical design steps right.

“In Malcolm Turnbull and Josh Frydenberg’s defense, they could be forgiven for aiming for the impossible,” Dr Wonhas said.

“Aurecon’s recent survey of more than 100 business executives drawn from the energy and government sectors, has revealed even the experts, who should know better, want the impossible.

“Almost two out of three respondents (62 per cent) want a combination of reliability improvements, cost and emissions reductions that we believe the sector cannot deliver.”

The survey also indicated an insufficient willingness by participants to compromise on the three crucial factors at the heart of the “energy trilemma”.

“The first step in the political debate needs to help us navigate a sensible national compromise on how to trade-off price, reliability and emissions outcomes,” Dr Wonhas said.

“It’s the foundation of the bi-partisan support for energy policy that everyone in the sector wants.

“This debate must not be driven by pre-conceived ideas or political agendas. Instead, it needs to be informed by engineering and economic facts.

“Even though we can’t have it all, thanks to recent advances in technology, it is much easier to achieve a sensible compromise today than it would have been only five years ago.”

Dr Wonhas said without the right network footprint, future renewable power stations are likely to be less efficient and more difficult to reliably integrate into our energy system.

“The market on its own will not fix this,” he said.

“In short, we need an honest and technically informed political debate that brokers a realistic compromise.

“And we need a balanced approach that combines the NEG’s market-based approach with better integrated plan for our energy future.

“If we achieve this, the NEG could be a vital component of a functioning energy system that delivers affordable, reliable and lower emissions energy for Australia.”

Read the report here: AURECON_2017-10_Energy-Survey-Powertrip-Report