The Government has put forward a plan to abandon the Clean Energy Target (CET) and instead adopt a National Energy Guarantee (NEG).
Earlier this year, Chief Scientist Alan Finkel presented the government with 50 recommendations on energy policy. The government pledged to adopt 49 of them, but not the 50th, a clean energy target. The CET would have forced electricity companies to provide a percentage of their power from low emissions technology such as renewables and efficient gas.
Prime Minister Malcolm Turnbull argues that the NEG will make power bills cheaper and more reliable while still cutting down carbon emissions. The limit has not yet been set, but Mr Turnbull says it will meet Australia's international carbon targets under the Paris agreement.
To meet the NEG, energy companies must guarantee they have a certain reserve of power that can be provided any time, on demand. At present, only coal and gas-fired power stations, and batteries that store renewable power, meet this ability. Mr Turnbull also said there will be no more subsidies for renewable power, because “green sources of energy” were now financially viable and could sustain themselves without government help.
For the home consumer, it is claimed, power bills will drop by $100 to $115 per year from about 2020 to 2030. In press conferences and radio interviews, Mr Turnbull calls the plan a “gamechanger”, but seems to struggle when asked how the figures were calculated. When Sabra Lane, of ABC's AM, pressed him on the issue, he said the figures were put forward by the Energy Security Board, calling them “the most knowledgeable experts in the field”. The Energy Security Board, established just two months ago, is largely comprised of representatives from energy regulators.
Victoria, Queensland and South Australia have already expressed dissatisfaction with the plan, with Queensland threatening to go it alone. Victoria's Energy Minister, Lily D'Ambrosio, says Federal Energy Minister Josh Frydenberg has offered no evidence to back up the figures. Other critics of the plan, including the Labor Opposition, also complain about a lack of detail.
Treasurer Scott Morrison said a report by the Australian Competition and Consumer Commission (ACCC) had been “a key input” to the policy development. The ACCC noted in the report that complexity in the market made it difficult for Australians to shop around for better deals and compare offers.
Even so, ACCC chairman Rod Sims says people will get better power price deals by choosing their retailers, not because of a clean energy target. The responsibility for lower home power bills is left to the consumer.