Reports | 6th Nov, 2017

7 reasons why the Turnbull government's National Energy Guarantee fails to deliver cleaner, cheaper electricity for Australians

In October 2017 the Turnbull government announced its intention to introduce a National Energy Guarantee scheme. It proposes to establish an obligation on electricity retailers to meet targets for sourcing ‘flexible and dispatchable’ generation, and to meet an average emissions intensity standard. The NEG proposal is a new idea underpinned by less analysis or thought than other comparable mechanisms such as a carbon tax, emissions trading scheme, emissions intensity scheme, clean energy target or reverse auctions to bring online clean energy projects and storage.

The motive for developing this new policy mechanism seems to be purely political – any better alternative had simply become unacceptable to the Coalition party room.

Here are 7 reasons why the NEG will fail to deliver cleaner, cheaper energy and therefore should be rejected:

1. It is worse than doing nothing for our renewable energy industry.

2. It may give polluting coal generators an incentive to keep polluting for longer.

3. It is inconsistent with our Paris climate agreement commitments or stronger targets necessary to limits global warming to 1.5 to 2°.

4. It concentrates market power with the ‘Big 3’ energy retailers (leading to higher electricity bills for consumers).

5. It has a major loophole – international offsets instead of domestic action.

6. It undermines state renewable energy and greenhouse pollution reduction targets.

7. It ignores the advice of the Chief Scientist and is a thought bubble with no economic modelling.

Download the briefer here