NEG target in crosshairs as CEC, SEC call for more ambition

Australia’s peak clean energy industry bodies have renewed calls for the federal government to ramp up the emissions reduction ambition of its National Energy Guarantee, or risk cutting the booming renewable energy sector off at the knees.

Both the Clean Energy Council and the Smart Energy Council say that the federal government’s emissions target – 26 per cent for the electricity sector by 2030 – is not good enough because it provides no signal to further investment.

The CEC, which released its annual Clean Energy Australia report on Wednesday, supports the structure of the NEG, but not its lack of ambition. The SEC is more outspoken, and says Australia must aim for a 45 per cent reduction in emissions in the sector, or scrap the NEG entirely.

The call from the two groups comes amid reports federal environment and energy minister Josh Frydenberg promised the Coalition party room on Tuesday that the 26 per cent target for 2030 would not be changed.

Analysts have pointed out that this means there will effectively be no incentive for any new renewables in the decade from 2020 to 2030, because that target will largely be met once the building for the renewable energy target is complete.

Right wing agitators Craig Kelly and Tony Abbott also reportedly suggested that the target be “back-ended”, meaning that any emissions reduction efforts should be put off for as long as possible.

But as Tristan Edis from Green Energy Markets has pointed out (see Tweet above), that would effectively mean Frydenberg would have to blockade wind and solar sites to stop them being built.

The CEC’s report notes 2017 was a “record year for records” for solar, wind and battery storage, but not for policy.

“There are now enough projects in the system to meet the 2020 Renewable Energy Target,” said CEC chief Kane Thornton in comments accompanying the report’s launch on Wednesday.

“Given we were only about halfway to the large-scale target at the beginning of 2017, it shows the remarkable level of deal-making and project activity during the year.

“However, it also shows that long-term bipartisan policy has been critical for investment in the energy sector, and that policy certainty beyond 2020 is becoming increasingly urgent.”

Thornton has been careful to avoid any directly negative comments about the NEG, either in the report or around its release, but in the past has sought to emphasise it is yet to endorse the policy, because it has not been finalised, and does not support the weak target.

As the 2018 report notes, as things currently stand, “no national climate or energy policy (is) in place to encourage affordable, reliable and clean electricity after 2020.

“The fate of the (NEG) is far from assured, after a decade of acrimonious political debate and destabilisation in the area,” it continues.

“While a strong consisted national policy would be preferable to navigating a patchwork of individual jurisdictions, the state and territory policy measures have been crucial to driving new investment in the absence of federal policy leadership.”

In it’s own briefing to the Australian governments on Wednesday, fellow industry body, the Smart Energy Council, was less inclined to pull punches.

The SEC has called on the state and territory governments to make their support of the NEG conditional on the federal government setting an emissions reduction target of 45 per cent by 2030 (from 2005 levels), while also keeping state renewable energy targets intact.

“The Smart Energy Council supports national targets of at least 50 per cent renewables and at least 45 per cent reduction in electricity emissions by 2030,” the briefing says.

“Both targets should be stronger but we have, tragically, lost almost a decade of action due to a failure of leadership at a national level.”

The SEC also wants states to ensure an absolute bottom line for emissions reduction – which it calls an Emissions Reduction Safeguard – of no less than 2 per cent a year from 2020.

This would put Australia on track for a 50-year decarbonisation rate, it says, rather than the 200-plus year timeline the nation is set to take under the NEG, with annual reductions of less than 0.5 per cent a year post 2020.

“States must retake the initiative and set the Emissions Reduction Safeguard as a floor for further negotiation and ultimate adoption of the NEG.

“States must ensure that the will be NO NEG unless the Emissions Reduction Safeguard is in place and operational,” the SEC says.