Renewables advocates slam National Energy Guarantee

Port Augusta solar power plant in South Australia
Port Augusta solar power plant in South Australia.

The federal government's National Energy Guarantee (NEG) policy, which was announced last year, was given provisional approval by state governments at the Council of Australian Governments (COAG) meeting in April, subject to further negotiation on details, including the emissions targets. What does this mean for renewable energy and climate action, key issues affected by Australia's coal-dominated electricity grid?

The NEG was announced after a sustained effort by the Coalition to paint renewable energy as a threat to the security of electricity supply. This propaganda tale began after a freak storm in 2016 knocked down power lines in South Australia, causing a state wide blackout. South Australia's high percentage of renewable energy was conveniently blamed, despite a lack of any evidence.

The closure of Victoria's Hazelwood coal-fired power station last March and the plans to close Liddell coal-fired power station in NSW in 2022, have since been used by federal and state politicians to make evidence-free claims that widespread blackouts will ensue. The far right of the Coalition have even called for the government to buy the clapped-out Liddell power station from its owner AGL to keep it open, even though the Australian Energy Market Regulator is sure that the closure plan poses no danger to electricity supply.

Details of the NEG that are available suggest that it will aim for the electricity sector to contribute 5% of Australia's overall greenhouse gas emissions reduction target under the Paris climate agreement. Not only is Australia's target low anyway, but since electricity is one of the easiest sectors to reduce emissions, this suggests the government's commitment to the targets is not sincere, or (less likely) they plan to push very difficult cuts in other sectors.

Renewable energy advocates and climate action campaigns have condemned the NEG, from the Smart Energy Council, representing solar and energy storage industries, to grassroots campaigns. Green Left Weekly interviewed three campaigners from the eastern states that will be affected by the NEG (it does not apply to the separate WA and NT electricity grids).

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Andrew Bray, from the Australian Wind Alliance, told GLW: "The single greatest problem with the NEG as it is currently framed is the government's hopelessly inadequate 26% emissions reduction target.

"Ageing coal plants are failing and ready to close and wind and solar, supported by a range of technologies producing instant power, such as batteries, pumped hydro and demand management, are ready to be deployed at mass scale, delivering financial and social benefits to regional communities across Australia.

"Tying down the sector with this inadequate target will pull on the handbrake and leave Australians with dirty, polluting coal plants that fail in the summer heat when they're needed most."

Pat Simons, renewable energy campaigner with Friends of the Earth Melbourne, thinks the NEG will effectively limit states' renewable targets.

"The core failure of the NEG is around the climate targets. They are weak and actually attempting to put a handbrake on change.

"The government is not attempting to solve the problem, they are trying to put their stamp on an energy policy. The weak climate target is a part of that — it's less than the states are doing. The states are the ones currently making a real commitment."

Shani Tager, from home solar owners' advocacy group Solar Citizens, continued this theme. "The [Malcolm] Turnbull government has set a target for renewable energy that is so low, it'll be worse than business as usual," she said.

"The design of the NEG means states such as New South Wales, with no renewable energy target or policy for large scale deployment of renewables, can sit back and let the other states do the heavy lifting when it comes to cleaning up our energy system."

Bray agreed. "A restrictive national target will tempt laggard states like NSW to risk depending on their ageing, failing coal fleet for longer, threatening their energy security and undoing good work being done over the borders."

The criticism of the NEG contrasts with praise for the Renewable Energy Target (RET). A policy of the former John Howard government in its original form, it was subsequently held up as a target for destruction by the Coalition parties, with a 20% reduction in the target made under the Tony Abbott government in 2015.

Nevertheless, the RET is set to be completed ahead of its 2020 deadline. According to Bray, this "demonstrates how foolish it was for the Abbott government to cut the target. The two-year delay in the installation of new renewable energy capacity caused by [the 2015] review led directly to the price spikes we saw when Hazelwood closed its doors last year before new supply was ready to come on stream."

"Achieving the RET before 2020 is cause for celebration," Tager said. "We're generating more clean power from the wind and the sun than ever before. It does, however, underscore the urgent need for a national energy policy that will ensure more renewable energy projects will come online after 2020."

Bray said the blockage is not so much in support for wind and solar, as these "have now passed the threshold where they no longer require support from the RET to compete in the market."

Instead, he said, "what is needed is a simple policy mechanism to ensure that high-polluting coal plants are shut down in a timely fashion, with time for coal communities to adjust and reskill. Once the market for new generation is in place, cheap, zero-carbon wind and solar will thrive and grow swiftly.

“Some have argued for an extension to the RET. This could be effective. Even the NEG, if it were backed by an ambitious target, would also have this effect."

Simons agrees that the success of the RET shows the strength of the renewable energy sector. "Why mess around with a NEG that could totally change the way the retail market works, when we have a policy that is actually working?" he said.

"Why not restore and extend the RET, and learn from what the states are doing? If not the [RET's tradeable] certificate system, then use reverse auctions. Other countries around the world do this.".

While state governments at COAG have supposedly "given the amber light" to the NEG, it is not clear whether they will demand enough from the federal government before signing off on a final version.

"If we're going to have a national policy it should build on what the states are doing, not take them backward," Simons said. "What's the point of a national policy that's worse than business as usual? Victoria has a legislated emissions reduction target, and should assess the NEG against that commitment."

Despite some improvements compared to the original version of the NEG, Bray said "the NEG remains a ‘fourth-best option’ that is only being considered because simpler mechanisms involving carbon prices have been vetoed by climate deniers in the Coalition.

"State governments should only sign on to a NEG that comes with an ambitious national emissions reduction target that builds upon the work done by state mechanisms."

Tager agreed that "having a high target for renewable energy has to be non-negotiable".

Where the negotiations will lead is not yet certain, but Simons sounded a note of warning: "We shouldn't judge the NEG on the possibility that the ALP will be elected [at the next federal election] and can improve it. State targets do give renewable energy some future after 2020, but if Labor governments lose office, then we could be left with no state or national targets for renewables".

Yet the fight over such low targets has an element of absurdity. "The lowest hanging fruit for reducing emissions across the economy is in the electricity sector," Bray pointed out. "100% renewables by 2030 is eminently achievable. A target of 50% renewables by 2025 should be considered the minimum starting point."