ACT Energy Minister Shane Rattenbury is prepared to stand in the way of Malcolm Turnbull’s big ticket energy reform unless the policy ramps up support for renewables and forces the energy sector to shoulder a bigger share of Australia’s carbon emissions reductions.
Mr Rattenbury, the leader of the ACT Greens, said the National Energy Guarantee was against the national interest, with a “weak” emission target and policy settings that would stymie new renewable energy projects.
He said the energy sector should deliver a steeper emissions cut than Australia’s overall 26 per cent Paris agreement commitment, because it was harder to make emissions cuts in the transport and agricultural sectors.
“We need to find an agreement to move the national energy market forward,” Mr Rattenbury said.
“What we can’t sign up to is a bad outcome, and we do have concerns with the current model. We don’t think it is in the national interest to go down the path that is currently being proposed. But if we can find a way through, then yes, we are keen to find an outcome.”
COAG energy ministers are awaiting a report on the detailed architecture of the agreement, ahead of a meeting later this month to discuss the plan. All jurisdictions are required to ratify the NEG for the agreement to be implemented.
Federal Energy Minister Josh Frydenberg said there were positive signs NSW, Tasmania and South Australia would support the agreement, while constructive talks had also occurred with Victoria and Queensland. He said it would be difficult for the ACT, which accounts for 1.5 per cent of the national electricity market, to stand in the way of an agreement.
“The ACT is a very small fraction of the national electricity market … and I cannot see a situation where you got unanimous agreement from the other states in the national electricity market, and the ACT blocking a historic national reform,” he said.
But Mr Rattenbury said the NEG’s proposed 26 per cent cut to carbon emissions wasn’t enough to secure the ACT’s support.
“If you want to reach Australia’s Paris agreement emissions reduction target of 26 per cent, then you are also going to need to take 26 per cent out of the transport sector, and the agriculture sector,” Mr Rattenbury said.
“And we know that it is both less economically efficient to do that, because they are higher cost sectors to reduce emission. And it’s frankly politically unlikely that you’re going to get 26 per cent out of those sectors. Energy is the cheapest, most cost-effective way to do it.”
The ACT is on track to meet its 100 per cent renewable energy target within two years, but still relies on the coal-dominated national grid to prevent blackouts when the sun doesn’t shine and the wind doesn’t blow.
Mr Rattenbury cited analysis by energy consultancies Energetics and RepuTex, which have criticised the level of ambition contained in the draft NEG.
According to RepuTex, renewable energy investment and energy sector emissions reductions are “likely to be far more advanced without the NEG than earlier analysis assumes”.
Energetics, in a recent report, said the 26 per cent emissions target “is so little that such an emissions target would probably lag rather than drive investment”.
“We find that even without a NEG this level of emissions reduction would be achieved,” it said.