Turnbull’s National Energy Guarantee policy prolongs coal hinders renewables

October 20, 2017 at 2:26 am Leave a comment

NEG compared. Courtesy: Environment Victoria

Malcolm Turnbull has rejected the Chief Scientist recommendation of a Clean Energy Target and given us a National Energy Guarantee in it’s place which will mostly focus on reliability and affordability with limited emissions reduction.

This policy is guaranteed to keep coal and gas playing a substantial role in electricity production and act to slow down the take up of renewables, batteries and other despatchable technologies such as pumped hydro and solar thermal.

There has been no modelling released for this National Energy Guarantee, with promises being made that it might save the average electricity consumer up to $100 per year on their electricity bill after 2020. Although some commentators believe $25 per year from 2020 might be more accurate.

Sounds very similar to the promise of reduced electricity bills when Abbott abolished the carbon price in 2014.

The National Energy Guarantee is predicated on electricity emissions being cut by 26-28 per cent on 2005 levels by 2030, a pro-rata value to Australia’s total emissions reduction commitment to the Paris Commitment. This is far less than envisaged by Finkel’s Clean Energy Target, or by business as usual, and far short of what we need to do for our Paris climate commitments.

There are a number of problems with this low goal for electricity emissions reduction.

  1. Firstly Australia’s Nationally Determined Contributions and Paris Commitment of 26-28 per cent reduction on 2005 levels by 2030 is rated as ‘insuffient’. It is much less than our fair share, and if all countries applied a similar level would result in 3-4C of warming this century.
  2. Secondly, there is an ambition mechanism built into the Paris Agreement whereby all countries will be expected to increase their emissions reduction targets. We know the combined promises of Paris didn’t get us to limiting temperatures to 2C let alone 1.5C. So Australia, along with most other countries, will need to increase our targets in coming years.
  3. Thirdly, it is much more cost effective and far cheaper to reduce emissions from electricity production than other sectors. The transport sector will especially benefit from decarbonisation of electricity. Think converting buses, cars and trucks to electric vehicles that can be widely charged from a grid substantially driven by renewables. If electricity only does it’s fair share, transport and agriculture will need to do far more in cutting emissions.

The Climate Carbon Tracker assessment for Australia in 2017 states:

There has been no improvement in Australia’s climate policy settings over the last year, and the 2017 CAT assessment confirms all previous assessments that its emissions are set to far exceed its Paris Agreement NDC target for 2030.

We rate the NDC target itself “Insufficient“, with a level of ambition that—if followed by all other countries—would lead to global warming of over 2°C and up to 3°C. In addition, if all other countries were to follow Australia’s current policy settings, warming could reach over 3°C and up to 4°C.

The National Energy Guarantee will see the proportion of renewables grow to just 26-28 percent, which is less than the current business as usual level of at least 35 percent as modelled by Finkel. Finkel argued the Clean Energy Target should achieve about 42 percent renewables by 2030.

But what target should we be aiming at, while keeping in mind reliability and affordability?

Climate Works Australia argued in a report released in July 2017 that we should be targeting emissions reduction in the electricity sector by 60 percent below 2005 levels by 2030 to meet our Paris targets. Decarbonising the electricity system is seen as crucial to meeting our commitments under the Paris Agreement. See Power Up: Australia’s electricity sector can and should do more to deliver on our climate commitments.

“Our research shows Australia’s electricity sector can cut emissions by 60 per cent below 2005 levels by 2030, which would allow Australia to achieve its current 2030 target without additional action in other sectors. We find the electricity sector is well placed to deliver emissions reductions beyond a proportionate share,” said Ms Denis-Ryan from Climateworks.

“If the electricity sector only cuts emissions by 28 per cent by 2030, other sectors will have to deliver more emissions reductions. This would require new policy that brings forward all of the energy efficiency opportunities we have identified to 2030, plus 40 per cent of the technical potential to reduce emissions through fuel switching, electrification and action on non-energy emissions in the buildings, transport, industry, waste and land sectors.” she said.

ClimateWorks also highlighted in September that Australia can address the energy trilemma and provide secure affordable energy while reducing greenhouse gas emissions – but not by extending the life of existing coal-fired power stations.

As the ABC points out in this article, the National Energy Guarantee will leave farmers, builders, trucking industry still waiting for their emissions reduction task, which will be much more expensive to undertake.

Meanwhile, very few are talking about the gains that can be made in energy efficiency that reduces electricity consumption and costs to consumers. As our member Andrea Bunting has highlighted in a letter to the Age, this is a no-brainer.

We also wrote recently that Minimum standards needed for rental properties for energy efficiency and thermal tolerance.


Comments on the National Energy Guarantee

Environment Victoria’s CEO Mark Wakeham said in a statement:

“It is deeply disappointing that the Prime Minister has rejected a Clean Energy Target in favour of a Coal Energy Target.”

“Australia joins Donald Trump’s United States as one of only two major national governments to remove support for investment in renewable energy and redirect it to ageing and polluting power stations.

“If the Prime Minister’s plan were implemented, the highly successful national renewable energy target would end in 2020 and Australia would have no real plan in place to achieve its Paris climate change commitments.

“While the devil is often in the detail of major new policies, in this case the devil is in the central idea that electricity retailers will be forced to buy power from old and polluting coal-burning power stations.

“We urge state governments and other political parties to reject the Coalition’s ill-conceived plan for polluters.

“By providing a lifeline for power stations like Liddell and Yallourn that are beyond their use-by dates, the Turnbull government is choosing a hotter, drier and poorer future for Australia.

“Regional Australia will be hardest hit as a Coal Energy Target would destroy the pipeline of renewable energy projects that would otherwise provide jobs and investment in regional areas.

“Instead of acting in the interest of 24 million Australians, the Turnbull government is designing energy policy for about 10 people sitting on the Coalition backbench.”

Australian Conservation Foundation Chief Executive, Kelly O’Shanassy, commented that the latest energy plan from Prime Minister Malcolm Turnbull was a grab bag of measures designed to placate big polluters and climate change deniers in his own party, while abandoning any credible effort to maintain a safe climate. They have released a comprehensive brief how the Turnbull Government is supporting fossil fuels: Digging a hole: How the coalition is burying renewables while trying to exhume coal.

“Since 2013 the only contribution the Turnbull and Abbott governments have made to climate and energy policy is chaos. Abandoning a Clean Energy Target and backing more dirty coal is no exception,” Ms O’Shanassy said.

“The Clean Energy Target was the key recommendation of the Finkel Review commissioned by the Prime Minister himself. It was no one’s preferred option but environment groups, the business community and the federal opposition were all prepared to work with the government to get something done.

“To abandon a Clean Energy Target and allow coal to remain in the system longer is a reckless policy failure. The responsibility lies with Prime Minister Turnbull and the veto Tony Abbott has over climate policy within the government.

“The amount of clean energy the government has indicated this policy will deliver is nowhere near what Australia has to put in place to play its fair role in securing a safe climate. We are again selling short future generations by slowing the transition away from polluting coal and gas.

“It is a national embarrassment that Australia’s climate pollution is still rising. We need a comprehensive plan to cut pollution otherwise we’ll continue to fuel the global warming that is killing our Great Barrier Reef, turbocharging extreme weather and threatening our liveable planet.”

The Climate Council slammed the new energy policy:

Climate Councillor and energy expert Andrew Stock said the Federal Government plan lacked any form of modelling, evidence or clear pathway to show how it will improve energy reliability, reduced emissions or affordability.

“This so-called “Energy Guarantee” represents a failure of leadership and lacks the level of detail needed for a serious long-term national plan. It doesn’t compare to the in-depth analysis and clear mechanisms for security and reliability provided by the Finkel Review.”

The energy sector veteran said the Government has ignored the industry’s call for clear targets, as the key to investment.

“This is like doubling down on horse and carts despite the invention of motor vehicles. Renewable energy is here, it is cheaper and cleaner than fossil fuels and clearly the way of the future.”

The Government announced the emission reductions for the electricity sector will be reviewed annually by the Energy Security Board. Constant reviews will continue uncertainty for investors.

Stock added, “An energy plan that fails to tackle climate change just kicks the can down the road to the States and next Federal Government.”

Stock said the Federal Government’s claim it would improve the energy grid’s reliability by relying on ageing, inefficient and unreliable coal and gas generation was nonsensical.

“After a comprehensive six month consultation process, detailed modelling and technical evaluation, Australia’s Chief Scientist and eminent panel concluded that the Clean Energy Target was the best approach to addressing climate change and driving electricity prices down.

The new plan is so heavily watered down that it won’t cut it.”

“This so-called ‘National Energy Guarantee’ guarantees nothing other than ongoing political chaos, with even higher pollution levels.”

Oxfam Climate Change Adviser Dr Simon Bradshaw said in a statement:

“Against the backdrop of devastating hurricanes, severe drought across East Africa and determined leadership from our Pacific Island neighbours, the Federal Government is poised to walk even further away from meaningful action on climate change.

“The Government’s proposed energy policy, including abandoning a clean energy target and prolonging the life of coal, is a slap in the face of the communities on the frontline of the climate crisis and a shameful rejection of Australia’s international responsibilities.

“While we have the opportunity to help create a brighter future for all, these moves will only serve to entrench poverty and inequality. More coal will drive more people into poverty through the devastating consequences of climate change and the direct toll of coal burning on local communities.

“The science and the economics are abundantly clear. The solution to energy affordability, reliability and tackling climate change lies in a rapid transition to 100% renewable energy and an end to the fossil fuel industry.

“Yet the Government has once again pandered to the fossil fuel industry and the dinosaurs in its ranks. This is bad for Australia and devastating for those already facing the brute realities of climate change.

“Australians and the rest of the world demand and deserve better.”

Look who else is claiming the credit for Turnbull’s energy policy:

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Entry filed under: National Electricity Market, news, Policy, renewable energy. Tags: , , , .

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