Windlab urges “choose no NEG” if emissions target unchanged

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Windlab CEO says renewables industry better of with no National Energy Guarantee at all, than with a NEG hobbled by 26% emissions reduction target.

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Works underway at Kennedy Energy Park. Image: Supplied

One of Australia’s leading renewable energy developers has declared that the industry would be better off with no National Energy Guarantee, rather than a NEG hobbled by a 26 per cent emissions reduction target that may not be able to be increased.

Roger Price, the CEO of Windlab, a listed company spun out of the CSIRO which is building the world’s first combined wind, solar and battery storage facility in north Queensland, says the industry is approaching a critical time amid the “craziness in Canberra” and as the final details of the NEG are drafted.

In a speech delivered in Sydney on Wednesday, before the shockwaves from Canberra as the entire Coalition voted in support of Pauline Hanson’s motion for a new coal-fired power generator, Price said that the renewable energy industry had a difficult choice.

“Among our industry, there is a view that the NEG is an architecture or mechanism that we can work with, that it is the fourth-best solution, but it is possibly workable,” Price said at the Large Scale Solar and Storage conference co-hosted by RenewEconomy and Informa.

“There seems to be a notion in business that maybe we can take a two-step approach to this … approve the mechanism and then hope that some future government can improve the emissions target and make it all OK.

“We know what happens if the emissions target is 26 per cent … we will have to find something else to do, and it will be a disaster for the economy generally in many ways … and we won’t reduce emissions from transport and agriculture without very significant economic impacts.

“It’s a bit of a joke. If it stays at 26 per cent, a lot of things are stuffed up.

“The notion that we can have this mechanism and just hope that a future government will increase the emission reduction target is incredibly fraught with danger.

“It’s not any easy decision to make, but what I’d encourage you all to think about is, if given choice of a NEG with 26 per cent, or no NEG, choose no NEG. You should be calling your state ministers to tell them exactly that.”

There appears to be considerable division within the renewable energy industry about exactly that point – with some insisting that the emphasis be put on the scope of emissions reduction targets, and others on the design of the mechanism, on the hope that the government will change.

Numerous studies have shown that the current 26 per cent emissions reduction target for the electricity sector will be all but met by 2020, or soon after, thanks to the RET, and the likely closure of Liddell.

That means that the NEG will give no signal for any new generation. And it is not yet clear that any future government will be able to change it, and the Coalition is seeking to lock in its target until 2030.

The Smart Energy Council has been one of the most critical opponents, and on Wednesday used the  Coalition’s decision to vote, en masse, in support of Hanson’s motion for new coal-fired power stations in the Senate, as an example.

“This is the straw that broke the camel’s back,” chief executive John Grimes said in a statement.

“When it boils down to it, the National Energy Guarantee is all about locking in coal and locking out renewables.

“If there was even the faintest shadow of doubt over whether the National Energy Guarantee has been designed to prop up coal or not, that’s completely gone out the window now.

“State and territory governments must not hand a blank cheque to the coal polluters.

“This junk policy is actually worse than not having a new national policy because the current one from the states is better.

“The emissions reduction target of 26 per cent proposed in the draft design paper is lower than what will be achieved with the current build and investment in renewable energy.”

Price said that the falling cost of renewables meant that they could be a facilitator of economic development, particularly in regional areas where they could offer low energy costs.

Windlab has been behind many of the major wind developments in Australia, and while the first stage of the Kennedy wind park will be 40MW of wind, 15MW of solar and 4MWh of battery storage, there is potential for up to 2GW of capacity, given its huge wind solar resource.

“If I told people five years ago (that wind and solar would win out on economics versus fossil fuels) people would have told me that I was smoking dope. Now it is clear. It just requires a bit of big thinking, but that is rare in politics at the moment.”

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13 Comments
  1. al edg 1 year ago

    Just a thought – tell me if i’m wrong. But isn’t one of the key things missing in the Australian energy market ‘Priority Dispatch’ for Renewables. Even with no policy, or even a NEG – if dispatch at any given price point had a tie breaker of emissions, then Wind/Solar/Wave whatever could always at any given price point take priority for that dispatch interval. So any time renewables can match the bid of a fossil generator, the renewable generator wins dispatch for that interval. Surely this would have the coal companies building wind farms just to maintain their revenue. Simple… isn’t it? I believe that’s the case in UK.

    • john 1 year ago

      Good question, i do know that settings were so out of date for wind turbines they closed down with any hind of a problem.
      Common practice overseas is to implement ride through technology and I believe has been amended.
      This does not answer your question perhaps a look at AEMO rules may shed some light.

    • solarguy 1 year ago

      Yep, is simple but the dumb shits can’t work it out.

    • David leitch 1 year ago

      the spot energy price system in australia pretty much gives zero marginal cost renewables priority the vast majority of time, unless they are constrained off for system security reasons.

  2. john 1 year ago

    Regardless of policy unless it specifically stops RE, Wind Solar PHES and battery storage will be implemented close to major energy usage areas and take either a PPA or market prices and be competitive.
    The ability to site RE at the highest yield areas closest to large users of power will be done first then gradually along the NEM grid or for that matter at best areas away from the large load areas.
    Western Australia is proposing a 85% penetration and on the study done the system will cope with this level of penetration.
    Report after report shows that the above is feasible and I feel will happen.
    Liddell is closing down yes but the company has a plan to replace it with RE and upgrade to present equipment.
    Is this the reason the knowledgeable senate, who are totally across the energy industry, voted for a new power station?
    Obviously not across the brief and they must have very poor advisers.

  3. Energy Governator 1 year ago

    As usual Roger is spot on. Having no policy would be better than implementing the NEG. It won’t reduce emissions beyond BAU, it will reduce retail competition, increase prices, and will not improve reliability. No matter how much coal and gas power retailers contract for, when the network falls over the power doesn’t flow – and the NEG does nothing to fix that.

    • Joe 1 year ago

      The NEG was never really about being serious policy. It is a political fix of sorts for The COALition despite the MOANash Forum groupies making a lot of noises. In the run to the next election the punters complaints are salved by The COALition waving around its impressive sounding National Energy Guarantee and saying, look here we’ve got it sorted, there’s no “Carbon Tax” (we never had a Carbon Tax it was an ETS), so vote for us and not Labor. But of course everything that we really do need will not be delivered by the NEG.

      • Energy Governator 1 year ago

        Correct. That’s why we need to get out and tell as many ‘punters’ as possible that it is a sham policy that will do nothing but raise your electricity bill (again). Spread the word.

      • juxx0r 1 year ago

        The NEG was perfectly named, it’s a “neg hit”, a backhanded compliment. Something that pretends to be something it’s not.

  4. michael nolan 1 year ago

    Agree with Roger Price. States must only sign up a ‘good’ NEG and refuse to sign a ‘dog-NEG’. Binary option with States with the negotiating power of ‘deal’ or ‘no-deal’.
    A ‘dog-NEG’ is emissions at 26% as electricity sector is the easier sector towards the 26-28% Paris agreement so must over-achieve versus Transport etc.
    And even 26-28% as total sector target under Paris is weak seen against the +1.5 to +2C warming goal.

  5. Nicko 1 year ago

    ‘Technology agnostic’ and they *vote* for new coal!?

    • Joe 1 year ago

      That would be the new…’Kleeeeeen Coalers’ like the High EMISSIONS Low Efficiency Coalers x 3 that ‘One Pauline’ wants built in QLD in exchange for voting for Coalition’s business mega tax giveaway. Get set for an announcement, a ‘dirty coal’ deal being done between The COALition and ‘One Pauline’.

  6. onesecond 1 year ago

    Brexit, Trump and the COALition. The English speaking countries somehow have gone off the rails. Maybe all the pollution. In the media and elsewhere.

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