newsCO.com.au–Australia’s biggest mining states, ACT raise issues about energy plan

April 17, 2018

WA’s worries hinge on the federal government’s insistence that the power sector deliver a ‘‘par’’ contribution to Australia’s national goal of slicing 2005 emissions levels 26 per cent by 2030.

WA energy minister Ben Wyatt said that means the federal government will look to other sectors ‘‘to do the heavy lifting’’ on emissions, potentially hurting his state more because of its heavily reliance on mining and resources.

Western Australia, which is heavily reliant on mining, is concerned the state will be disproportionately burdened by the NEG.

Western Australia, which is heavily reliant on mining, is concerned the state will be disproportionately burdened by the NEG.

Western Australia produced more than half Australia’s $209 billion mineral and energy exports last year, according to WA government figures.

Mr Frydenberg said he was hopeful that the government could secure approval on Friday to take the NEG’s design to the next stage in order to get a final sign-off by the states and territories at a follow-up meeting scheduled in Sydney for August.

“Under the [NEG] the electricity sector will be obligated to reduce its emissions by 26 per cent in line with our international commitments,’’ he said.

‘‘This will deliver a more affordable and reliable energy system as we transition to a lower emissions future.”

Changes to the east coast-based national electricity market, to which the NEG applies, must be agreed by all member states.

WA and the Northern Territory are not part of the market, however the package has national implications and Mr Frydenberg says the two jurisdictions could join the NEG in future.

The smallest member of the national electricity market, the ACT, reiterated on Tuesday that the design of the NEG fell short of what will win its final support.

‘‘The policy parameters of the NEG risk an outcome that would be worse than if states and territories continued to lead the way without a NEG in place,’’ said Shane Rattenbury, the territory’s minster for climate change and sustainability.

The ACT said ‘‘serious deficiencies’’ include the weak overall target and the prospect that ACT consumers could end up paying twice for emission reductions for gains already made.

The issue of so-called additionality remains unsolved, with states that do more than the national target at risk of having their efforts taken up by laggards that do less, Mr Rattenbury said.

Meanwhile, consultancy Green Energy Markets says renewable energy’s rapid expansion is outpacing projections used in the NEG, underscoring the scope for a much higher emissions target.

Their analysis says the NEG is based on an estimated 9271 megawatts of new renewable energy capacity being added to the national electricity market by 2030. However, wind, solar and other clean energy projects already under construction or to be supported by government auctions will alone deliver 9691 megawatts.

The surge in renewables meant the NEG’s emissions target was ‘‘completely inadequate’’, Green Energy Markets analysis director Tristan Edis said.

‘‘It’s not driving any emissions reductions and it’s not even business as usual.’’
Small-scale solar, such as rooftop panels on homes and factories, are also running far ahead of the level modelled for the NEG by Frontier Economics.

The economics consultancy was commissioned at the end of 2017 by the Energy Security Board.
Rising power bills and falling costs for solar panels triggered a record monthly record of 127 megawatts of capacity being installed last month, Green Energy Markets said.

Not only are installations up 56 per cent more than for the first quarter for 2017, the rate is about 50 per cent more than assumed in the economic modelling of the NEG, the group said.

Peter Hannam

Peter Hannam is Environment Editor at The Sydney Morning Herald. He covers broad environmental issues ranging from climate change to renewable energy for Fairfax Media.

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