No replacement for mothballed NEG

AUSTRALIA: The new Australian energy minister said there will not be a replacement for the National Energy Guarantee (NEG) policy, proposed by former prime minister Malcolm Turnbull, and the government will let the current system expire in 2020 without a new one in place.

Australian energy minister Angus Taylor addresses parliament (pic: Australia Parliament)

Angus Taylor told Australia’s parliament the current renewable energy target (RET) policy, designed to support clean energy up to 33TWh by 2020 (roughly 23.5% of demand), will expire without a new system to take its place.

The NEG policy, which had been designed to come in to effect once the RET expires, was shelved by the new Scott Morrison administration.

Morrison took power after ousting Turnbull in late August. Turnbull faced growing pressure from factions within his own party, which disagreed with the NEG’s proposal of ensuring deployment of renewable energy in the next decade.

Now, new energy minister Taylor has taken aim at renewable energy and emissions policies in Australia. He claimed renewables growth is reducing energy security and that emission reduction targets are driving up household bills in some areas.

Writing in the Australian Financial Review newspaper, Taylor said: "The reliability of our electricity grid is under pressure.

"The renewable energy targets in Victoria, Queensland and the [Capital Territory] are dramatically worsening this situation, with unprecedented additions of intermittent wind and solar putting pressure on reliable baseload generators to exit.

"The Victorian grid will be stretched to the limit this summer. Given its 50% renewable energy target, South Australia now has among the highest prices in the world and poor reliability."

And speaking in the Australian parliament, Taylor told policy makers the government was confident in reaching the 26% emissions reduction target "without further government intervention".

He said the government would "back investment in fair dinkum reliable generation because that’s what this country needs".

"It doesn’t need to be stuffed with intermittent generation that drives up prices and drives down reliability," he added.

However, earlier this month, the research group Australia Institute released figures that showed renewable power made up 19.7% of the national energy market (NEM), with wind providing 55% of the power generation in South Australia during August.

"This unprecedented amount of new renewable generation coming on to the grid will increase competition and put downward pressure on price," said Hugh Saddler, an energy expert and author of the report.

"Despite the bad wrap renewables often get from government, right now renewables are the only thing putting downward pressure on electricity prices.

"It is hard to see how more renewables, supported by a credible electricity emission reduction target of 45%, would be economy wrecking…" he added.